In Kenya World Bank trims growth forecast for 2015 and 2016

Kenya's shilling has lost 14 percent against the dollar this year and interest rates have climbed by 300 basis points.

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World Bank President Jim Yong Kim participates in an International Monetary Fund (IMF)-World Bank discussion titled 'Conversation on Climate Change' during the 2015 Annual Meetings of the IMF and the World Bank in Lima, Peru, October 7, 2015. REUTERS/Paco Chuquiure play World Bank President Jim Yong Kim participates in an International Monetary Fund (IMF)-World Bank discussion titled 'Conversation on Climate Change' during the 2015 Annual Meetings of the IMF and the World Bank in Lima, Peru, October 7, 2015. REUTERS/Paco Chuquiure
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The World Bank said on Thursday it had trimmed Kenya's growth forecast for this year and 2016, saying east Africa's biggest economy was facing headwinds from currency volatility and tighter monetary policy.

The World Bank put 2015 growth at 5.4 percent, lower than a previous estimate of 6 percent, and forecast the economy would expand 5.7 percent in 2016, down from 6.6 percent.

A currency dealer counts Kenya shillings at a money exchange counter in Nairobi October 23, 2008. REUTERS/Antony Njuguna play A currency dealer counts Kenya shillings at a money exchange counter in Nairobi October 23, 2008. REUTERS/Antony Njuguna

 

"These estimates ... take into account more recent data on exchange rate, inflation, fiscal consolidation and balance of payments pressures," the bank said in a report.

Kenya's shilling has lost 14 percent against the dollar this year and interest rates have climbed by 300 basis points.

READ: North African nation to receive $3 billion loan from world: finance minister

The World Bank said Kenya's public debt, which went up 0.05 percent to 44.5 percent of gross national production in 2014/2015, remained "sustainable".

A fuel attendant handles Kenyan shilling notes at a petrol station in the capital Nairobi March 15, 2011 REUTERS/Noor Khamis play A fuel attendant handles Kenyan shilling notes at a petrol station in the capital Nairobi March 15, 2011 REUTERS/Noor Khamis

 

The World Bank said Kenya remained on course to be one of Africa's fastest growing economies despite a slight slowdown in economic expansion.

"We believe that the Kenyan economy remains solid," John Randa, a senior World Bank economist, said in Nairobi.

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