Kenya has cut its 2017 growth outlook due to slowing credit growth and expects the economy to expand by just over 6 percent next year, down from an initial forecast of 6.5 percent, a senior treasury official has said.
Private-sector credit grew just 7.1 percent in July from 17.8 percent in December of last year, the central bank said in September. That is well below what the central bank says is ideal credit growth of 12 to 15 percent.
The contraction in July was before a cap on commercial lending rates imposed by the government in September, a move that is expected to further shrink credit levels.
According to Geoffrey Mwau, the director general of Kenya’s fiscal and economic affairs, most of the country’s economic growth momentum was driven by public- sector investment.
The East African nation is building a new multi-billion- dollar railway line from the coast, expanding its road network and constructing new power plants and dams.