{
  "title": "IMF Staff Concludes Visit to Kenya",
  "publication": "IMF News, December 21, 2018",
  "sourceUrl": "https://www.imf.org/en/news/articles/2018/12/21/pr18493-kenya-imf-staff-concludes-visit",
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  "summary": "A staff team from the International Monetary Fund (IMF), led by Benedict Clements, visited Kenya from December 10-20, 2018 to hold discussions on a new IMF-supported program.",
  "publishDate": "2018-12-21",
  "sections": [
    {
      "heading": "Mission summary",
      "content": "- A staff team from the International Monetary Fund (IMF), led by Benedict Clements, visited Kenya from December 10-20, 2018 to hold discussions on a new IMF-supported program.\n- End-of-Mission press releases convey preliminary findings; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board."
    },
    {
      "heading": "Economic performance",
      "content": "- Real GDP growth accelerated to 6 percent in the first half of 2018, from 4.9 percent in 2017.\n- The acceleration of growth is attributed to:\n  - a strong recovery in agriculture due to improved weather conditions;\n  - resilient performance of services sectors; and\n  - sustained confidence in the economy.\n- Inflation:\n  - Authorities’ target range: 5+/-2.5 percent.\n  - Headline inflation stood at 5.6 percent y/y as of November 2018.\n  - Lower food prices and an appropriate monetary policy supported inflation within the target range."
    },
    {
      "heading": "Fiscal developments",
      "content": "- Fiscal adjustment in the fiscal year ending June 2018:\n  - Overall deficit declined to 7.5 percent of GDP from 8.9 percent of GDP the previous year.\n  - Revenues were significantly lower than budgeted and 0.4 percentage points of GDP lower than the previous fiscal year.\n  - Fiscal consolidation was primarily achieved by reducing public investment.\n- Policy actions:\n  - Authorities adopted a series of revenue-raising measures in September 2018 to arrest the decline in revenue.\n  - These measures are expected to help reduce the fiscal deficit to a targeted 6 percent of GDP in the current fiscal year.\n  - Some spending restraint may still be necessary."
    },
    {
      "heading": "External sector",
      "content": "- External current account:\n  - Narrowed to 5.3 percent of GDP in the year to September 2018 from 6.3 percent of GDP in 2017.\n  - Improvement reflects improved agriculture exports, rising tourism receipts, strong diaspora remittances, and lower SGR-related capital goods imports.\n- External buffers:\n  - Foreign exchange reserves at about US$8.0 billion as of end-November 2018.\n  - External stability was highlighted as a policy objective."
    },
    {
      "heading": "Banking sector and credit",
      "content": "- The banking sector remains stable, resilient, well capitalized, and liquid.\n- Non-performing loans (NPLs):\n  - NPL ratio peaked at 12.7 percent in August 2018 and fell to 12.3 percent in October 2018.\n- Credit growth to the private sector:\n  - Averaged 3.2 percent y/y since the interest rate controls were adopted in September 2016.\n  - Improved slightly to 4.4 percent y/y in October 2018.\n  - Much stronger credit growth will be necessary to sustain high economic growth."
    },
    {
      "heading": "Discussions and policy priorities",
      "content": "- Discussions focused on:\n  - Fiscal policies to achieve the fiscal deficit target of 6 percent of GDP in fiscal year 2018/19 and further fiscal consolidation in fiscal year 2019/20.\n  - Policies to support higher credit growth to the private sector.\n  - Structural reforms to ensure the sustainability of investment-driven, inclusive growth.\n- Authorities reiterated commitment to:\n  - maintain public debt on a sustainable path;\n  - contain inflation within the target range; and\n  - preserve external stability.\n- The IMF team reported significant progress during the visit and indicated discussions will continue."
    },
    {
      "heading": "Meetings and stakeholders engaged",
      "content": "- The team met with:\n  - Cabinet Secretary for the National Treasury, Mr. Henry Rotich;\n  - Governor of the CBK, Dr. Patrick Njoroge;\n  - Mr. Joseph Kinyua, Chief of Staff and Head of the Public Service;\n  - Principal Secretary for the National Treasury, Dr. Kamau Thugge;\n  - Deputy Governor of the CBK, Ms. Sheila M’Mbijjewe; and\n  - senior government and CBK officials.\n- Staff also held productive discussions with representatives of the private sector and development partners.\n\nPress Release No. 18/493 — December 21, 2018. IMF Communications Department.\n\n---\n\n\n References\n\n- Kenya and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2018/12/21/pr18493-kenya-imf-staff-concludes-visit"
    }
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    "Published: December 21, 2018",
    "A staff team from the International Monetary Fund (IMF), led by Benedict Clements, visited Kenya from December 10-20, 2018 to hold discussions on a new IMF-supported program.",
    "End-of-Mission press releases convey preliminary findings; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.",
    "Real GDP growth accelerated to 6 percent in the first half of 2018, from 4.9 percent in 2017.",
    "The acceleration of growth is attributed to:",
    "Inflation:",
    "Fiscal adjustment in the fiscal year ending June 2018:",
    "Policy actions:",
    "External current account:",
    "External buffers:",
    "The banking sector remains stable, resilient, well capitalized, and liquid.",
    "Non-performing loans (NPLs):",
    "Credit growth to the private sector:",
    "Discussions focused on:",
    "Authorities reiterated commitment to:",
    "The IMF team reported significant progress during the visit and indicated discussions will continue.",
    "The team met with:",
    "Staff also held productive discussions with representatives of the private sector and development partners.",
    "[Kenya and the IMF](http://www.imf.org/external/country/KEN/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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