Kenya says economy to slow down ahead of elections

Kenyas economy is projected to grow 3.5 percent to 4.5 percent this year, according to the countrys economic survey for 2012 published on Tuesday, weighed down by high interest rates, excessive rainfall and high spending because of the general elections. Planning Minister Wycliffe Oparanya said on Tuesday that the new projection is much lower than the 5.2-percent forecast in a budget policy statement released in April but is seen as realistic in absence of short term measures to boost the economy. Kenyas economy grew by 4.4 percent in 2011 compared to 5.8-percent growth recorded in the year 2010. Oil imports will continue to weigh down economic growth because it is a major expense, until the country starts benefiting from the newly discovered oil reserves, Oparanya told journalists during the launch of the report in Nairobi. The east African nations demand for petroleum product increased by 1.9 percent in 2011 that translated into higher spending for the commodity, according to the Economic Survey. Kenyas economy is also weighed down by the high cost of oil that accounts for half of the countrys import bill. The implementation of the new constitutions is also weighing down government expenditure as is the states salary bill. The minister said Kenya is betting on high spending on infrastructure like roads and waterworks by the government to help the economy withstand the dampening pressures. He said the country is also at advanced stages of constructing a standard gauge rail line from its coastal city Mombasa to its neighboring Uganda and this is expected to improve economic growth by at least 1 percent.

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Kenya says economy to slow down ahead of elections