The Central Bank of Kenya (CBK) forecasts a resurgence in imports for the current year, driven by a stabilized exchange rate and improved dollar availability compared to the previous year. This projection comes as the apex bank anticipates an 11 percent growth in imports, following a decline observed last year due to challenges in accessing foreign currency and a sharp depreciation of the Kenyan shilling.
Last year’s decline in imports, except for food and raw materials, affected various sectors, with manufactured goods experiencing the most significant drop at 20.5 percent. The recent strengthening of the exchange rate is expected to alleviate some of these challenges, as evidenced by a moderation in input costs.
According to Governor Kamau Thugge, the CBK expects imports to increase by 11 percent this year, echoing positive sentiment regarding the outlook for international trade. This optimism is further supported by the Stanbic Bank Kenya Purchasing Managers’ Index report for March, which notes a slowdown in inflationary pressures attributed to a stronger exchange rate against major currencies.
While imports are poised for growth, exports are also expected to rebound in 2024 after a marginal decline of 2.2 percent in 2023. However, challenges persist for exporters in accessing foreign currency, particularly for importing intermediate goods necessary for production.
In summary, the CBK’s outlook suggests a cautious optimism regarding the resurgence of imports in 2024, driven by favorable exchange rate conditions. Despite challenges, stakeholders remain hopeful for a balanced growth trajectory in Kenya’s trade landscape.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
9th April, 2024
