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Reuters
27-05-2025
- Business
- Reuters
World Bank cuts Kenya's 2025 growth forecast as private sector squeezed
NAIROBI, May 27 (Reuters) - The World Bank has cut Kenya's growth forecast for this year by half a point from its initial prediction to 4.5%, it said on Tuesday, citing high levels of debt, high lending rates and a decline in private sector credit. Kenya, which is East Africa's biggest economy, has recorded robust annual growth rates, but high public debt, repayments, economic inequalities and questions on governance have curbed its performance. "Domestic borrowing, coupled with high lending rates, risk crowding out the private sector," Naomi Mathenge, a senior economist at the World Bank, told a briefing on the Kenya Economic Update report, which is usually published twice a year. The government has used the domestic market to fund its budget due to lower financing from external sources, the report said, while unpaid bills and tax revenue shortfalls have undermined its fiscal consolidation efforts. Authorities have managed to keep inflation and the foreign exchange rates stable since last year, allowing policymakers to start easing, but real lending rates have not followed, the report said. This has led to a decline in credit growth, affecting sectors such as manufacturing, finance and mining, partly due to lower demand. Bad loans have also increased, especially among small commercial lenders, the report said, compounding the situation. Private sector credit growth was -1.4% last December, the World Bank said in the report, compared with growth of 13.9% a year earlier. Kenya also faces risks from its debt, which is 65.5% of GDP, since the country is classified as at high risk of distress. The economy expanded by 4.7% last year, down from 5.7% in the previous year, partly due to unrest in the middle of last year in protest at tax hikes. Growth is expected to recover to about 5.0% in the next two years, the World Bank said, provided risks such as poor weather are avoided. The World Bank urged the government to implement targeted tax reforms, including the elimination of exemptions in certain consumption tax, to boost revenue, support inclusive growth and lower debt.
Zawya
28-04-2025
- Business
- Zawya
World Bank upgrades Egypt's FY2024/25 GDP growth forecast to 3.8%
Arab Finance: The World Bank has raised its forecast for Egypt's real gross domestic product (GDP) growth for fiscal year (FY) 2024/2025 by 0.3% to 3.8%, according to its latest semiannual MENA Economic Update. The financial institution also maintained its projection for Egypt's GDP growth at 4.2% for FY2025/2026. It is also worth noting that the International Monetary Fund (IMF) recently raised its forecast for Egypt's economic growth to 3.8% for the current FY2024/2025. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
24-04-2025
- Business
- Zawya
World Bank forecasts moderate growth for MENA economies in '25
WASHINGTON: Growth in the Middle East and North Africa (MENA) is forecast to moderately accelerate in 2025 amidst uncertainty, according to the World Bank's latest Middle East and North Africa Economic Update released on Wednesday. The region is estimated to have grown at a modest 1.9 percent in 2024 and growth is forecast to moderately rise to 2.6 percent in 2025, reads the report entitled "Shifting Gears: The Private Sector as an Engine of Growth in the Middle East and North Africa." These forecasts are shadowed by uncertainty, given the rapidly changing global environment. The uptick among oil exporters is linked to plans to roll back cuts in oil production. The rebound in oil importing countries is expected to be driven by an increase in consumption as inflation eases and a recovery in the agricultural sector in some economies. The forecasts are clouded by high uncertainty, due to factors such as conflict, extreme weather shocks, developments in oil markets and a changing global policy environment. This uncertainty is further exacerbated by the potential impacts of volatile trade dynamics on global growth and inflation. The report further highlights that conflict can reverse decades of economic progress with long-lasting detrimental effects. Shifting Gears explores the critical role of the private sector in driving growth, creating jobs and spurring innovation. Stronger growth in the region has been held back by the absence of a thriving private sector. The report finds that most of the private sector in MENA is not dynamic. Labor market productivity has been largely declining across many countries in the region. Few firms invest and innovate. There is little firm entry into and exit from markets. Moreover, a divide persists between a small formal sector and a large informal sector in terms of productivity. Few women participate in the private sector. "The region has long underused human capital. Women are largely left out of the labor market. Businesses can find more talent by attracting women leaders, who in turn will hire more women," said Ousmane Dione, World Bank Vice President for the Middle East and North Africa. "Closing the gender employment gap could substantially boost income per capita by around 50 percent in a typical MENA economy," he noted. Both governments and businesses play complementary roles in developing a more dynamic private sector. Governments in the region can boost the performance of firms by promoting competition in markets, improving the business environment, and investing in data collection and access. "A dynamic private sector is essential to unlocking sustainable growth and prosperity in the region," said Roberta Gatti, World Bank Chief Economist for the Middle East and North Africa. "To realize this potential, governments across the region must embrace their role as stewards of competitive markets," she pointed out. Businesses themselves can build capacity by improving their management practices. Harnessing the untapped talent of women entrepreneurs and workers could foster growth. The report contends that a brighter future for the MENA private sector is within reach if governments rethink their role and firms effectively invest and harness talent. All KUNA right are reserved © 2022. Provided by SyndiGate Media Inc. (
Zawya
29-01-2025
- Business
- Zawya
Kuwait project activity accelerates in Q4 2024
Kuwait project awards jumped in the fourth quarter of 2024 to 1.2 billion Kuwaiti dinars ($4 billion), which was the best quarterly performance since the second quarter of 2016, National Bank of Kuwait (NBK) said in a report on Wednesday. The report titled 'NBK Economic Update: Kuwait Quarterly Brief,' stated that the construction sector accounted for half of all awards (nearly $2 billion), with the Public Authority of Housing Welfare (PAHW) making progress on various housing projects including the affordable housing project in Al-Nayeem. Power and Water came next, notching up KWD370 million ($1.2 billion) in contract awards. Kuwait Oil Company's project to drill 141 wells helped push awards in the oil and gas sector. The report noted that for 2024 as a whole, KWD2.7 billion ($8.8 billion) worth of projects were awarded, a 44 percent increase on 2023 and the highest figure since 2017 as government's push to expand housing and strengthen the domestic electricity grid boosted project activity in power and water, and construction sectors. "The near-term outlook remains constructive, especially with the government expected to re-emphasise in its forthcoming economic agenda speedier implementation of Vision 2035 infrastructure development goals,' the report noted. Citing MEED Projects data, the NBK report said the 2025 project pipeline is estimated to touch KWD7.8 billion ($26 billion), 60 percent of which are in power and water sector. Notable projects for 2025 include the KWD1.2 billion Al-Zour North IWPP Phases 2&3, currently in the bid evaluation phase, and KNPC's KWD225 million Al-Mutlaa project, which is expected to be awarded in the first quarter of 2025. (Writing by Deva Palanisamy; Editing by Anoop Menon)
