2008年-世界发展银行全球_Economic_Impact_of_the_Political_Crisis_in_Kenya___2008_and_Beyond_20页_252kb

Summary of the Economic Impact of the Political Crisis in Kenya: 2008 and Beyond

Core Content

The document outlines the economic impact of the political crisis in Kenya, particularly focusing on the events of 2008 and their long-term implications. It provides a comprehensive analysis of the effects on GDP, inflation, key sectors, poverty, and fiscal and external accounts. The World Bank team, including several lead economists and senior economists, prepared this report to assess the situation and project future economic performance.

Main Points

Economic Activity and Inflation

• GDP Growth: Before the crisis, Kenya was projected to grow at 6.3% in 2007 and 7.5-8% in 2008. However, due to the political crisis, growth is expected to be significantly lower.
• Base Case Growth: A base case growth rate of about 3% is expected for 2008, with potential for an additional 1-1.5 percentage points if recovery measures are implemented effectively.
• Downside Risk: Continued violence or government inefficiency could result in zero or negative growth in 2008.
• Inflation: Inflation rose sharply, reaching 18.2% in January 2008 (highest since 2004). It is expected to remain high throughout 2008, with an estimated 15% for the year, and decline to 10% in 2009 and 8% in 2010.
• Poverty Impact: The crisis has led to a 22% increase in poverty headcount and a 38% increase in severe poverty. This reverses previous five-year gains on poverty reduction.

Sectoral Performance

• Tourism:
  • Tourism, which contributes 5-10% of GDP, has been severely affected by the crisis.
  • Tourist arrivals dropped by 92% in the first quarter of 2008.
  • Tourism revenues are expected to be 60% below pre-election levels in Q1 2008 and 52% below Q1 2007.
  • The sector is expected to recover gradually, but not return to previous levels before 2010.
• Transport, Communications, and Financial Services:
  • These sectors account for about 50% of GDP (including tourism).
  • Transport and communication sectors were severely disrupted by violence and have been negatively impacted.
  • Financial services are expected to grow at 5-6% over the next two years, down from 8% in 2007.
  • The sector is likely to lead growth in 2009 and 2010.
• Agriculture:
  • Agriculture, contributing 25% of GDP, faced labor displacement, farmland destruction, and supply chain disruptions.
  • The short rains harvest was poor, leading to a 30% loss of crops and 15-20% loss of maize production.
  • Cut-flower exports increased by 15% in January 2008, but other agricultural sub-sectors like coffee and tea are expected to decline.
  • Sectoral growth is projected to be 4-5% in 2009 and 6% in 2010.
• Industrial Sector:
  • Manufacturing, construction, and SMEs contribute about 15% of GDP.
  • The sector faced supply chain issues, asset destruction, and a 40% drop in output in the Western region.
  • Industrial growth is expected to be 3-4% in 2008 and 5-6% in 2009 and 2010.

Fiscal and External Accounts

• Budgetary Impact: The Ministry of Finance issued a budget circular in February 2008, cutting certain expenditures due to expected revenue losses.
• Recovery Cost: The Social Economic Recovery Strategy is estimated to cost Kshs 31.47 billion, which the government seeks to raise from donors.
• Deficit Projections: The 2007/2008 fiscal year is expected to have a deficit of 5.3% of GDP. For the next two years, the deficit is projected to be 3-4%.
• External Account: While the external account is considered manageable, global oil and food price increases and a potential global slowdown pose risks.

Financial Markets and Investor Confidence

• Interest Rates: Key interest rates have declined, indicating improved market sentiment.
• Exchange Rate: The exchange rate has gradually strengthened, suggesting some recovery.
• Investor Sentiment: There is an expectation that investor confidence will improve with the formation of a national unity government.

Key Information

• Poverty Increase: The crisis has led to a 22% increase in poverty headcount and a 38% increase in severe poverty.
• Sectoral Decline: Tourism, transport, and agriculture sectors were the most affected in the short term.
• Fiscal Challenges: The government faces a significant challenge in funding the recovery strategy, with potential for further cuts in development programs.
• Growth Projections: Base case growth for 2008 is 3%, with potential for 5% in 2009 and 6% in 2010.
• Inflation Trends: Inflation is expected to remain high in 2008 and decline to 8% in 2010.
• Donor Dependence: Donor funding is critical for recovery, and the government needs to demonstrate effective use of funds to attract support.

Conclusion

The political crisis in Kenya has had a significant and negative impact on economic activity and poverty levels. While the immediate effects are severe, the document outlines a path to recovery, emphasizing the need for effective governance, security, and investment in key sectors. The outlook for 2009 and 2010 is more optimistic, with growth projections of 5% and 6% respectively, provided that the government successfully implements recovery measures and maintains stability.