Part 5/6:
Looking ahead to the coming year, the World Bank has tempered its growth expectations, outlining a moderate and gradual economic recovery in the short term. However, many challenges loom large. Kenya's debt is categorized as being at high risk of distress, with domestic debt now comprising 51% of the total debt stock. This dynamic is concerning, especially given the high yields and shorter maturing periods associated with domestic borrowing.
The local lending market also shows signs of strain, constricting financial flow to the private sector. This is largely due to high-interest rates, which coupled with government borrowing, are crowding out private enterprises.