The staff report for the fourth review under the three-year arrangement under the Extended Credit Facility, request for a waiver and modification of performance criteria, prepared by a staff team of the IMF, following discussions that ended on September 25, 2012, with the officials of Kenya on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on October 15, 2012. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
International Monetary Fund. Western Hemisphere Dept.
Macroeconomic outturns are steadily improving. After 7 consecutive quarters of positive growth, real GDP seems on target to grow by 1.7 percent in FY16/17, driven by agriculture, construction, and tourism. Inflation and the current account deficit remain contained, supported by low oil prices. Employment is growing, but unemployment is a chronic issue. Business and consumer confidence are near historic highs. The 7 percent of GDP primary surplus target is set to be reached, and public debt is on a downward path.
This 2004 Article IV Consultation highlights that after a period of prolonged weakness in economic activity, persistent deflation and rising fiscal deficits, the macroeconomic outlook for Hong Kong Special Administrative Region has improved significantly since mid-2003. The recovery has gained significant momentum and become broad-based in 2004. The consolidated fiscal deficit for FY2004/05 is now projected at about 1¾ percent of GDP, compared with the budget target of about 5 percent of GDP. The improvement relative to the budget is on account of buoyant revenue performance and continued expenditure restraint.