The national treasury has released the latest Kenya macroeconomic outlook for the FY2021/2022 to FY2023/2024 highlighting recent economic developments and their effects on the medium-term budget.
According to treasury’s macroeconomic projections, the real estate sector’s GDP growth is expected to shrink to 0.7 per cent in 2020 compared to 5.3 per cent in 2019. However, growth is expected to return to 5.2 per cent in 2021 as the pandemic situation eases.
In construction, GDP growth is projected to decline to 2.9 per cent compared to 6.4 per cent in 2020, and the 2021 forecast of 4.6 per cent.
“The construction sector has generally declined in the second quarter of 2020, but improvement has been observed in cement consumption in May and June 2020, compared to April,” the report says.
Accommodation and Restaurant property investors are expected to take the biggest hit as the sector’s GDP growth is expected to move deep into negative territory, recording -18.7 per cent in 2020 and -9.1 per cent in 2021.
The national treasury project that the hotel, accommodation and restaurant sector will not return to 2019 growth levels until 2024.
However, investors may look to the health and in which growth is projected to maintain an upward trend through to 2025.
Growth in the education sector is also expected to recover and stabilize, from 5.4 per cent in 2019 to 6.3 per cent in 2021 despite a -2 per cent decline in 2020
The report shows that the ICT sector is expected to take the least hit and to recover the quickest from any effects suffered during the pandemic.
The government has set aside Ksh. 56.6 billion (or 0.5 per cent of GDP) in the current financial year for an 8-point Economic Stimulus Pogramme to Support targeted activities infrastructure, education, business liquidity etc.
The country’s GDP is expected to grow by 2.6 per cent in 2020.
Read Also; Latest Kenya real estate outlook