Summary and Outlook
International Scene
World real Gross Domestic Product is estimated to have grown by 5.9 per cent in 2021 compared to a contraction of 3.1 per cent in 2020. The growth was mainly attributed to easing of COVID-19 restriction measures which led to increased global trade and increased activities in both the industrial and service sectors. The growth was manifested in advanced economies and Emerging Markets and Development Economies which expanded by 5.0 per cent and 6.5 per cent, respectively, in the review period. Sub-Saharan Africa economy grew by 3.7 per cent in 2021, mainly due to favourable weather conditions in most of the countries in the region. East Africa Community economy grew by 4.9 per cent in the period under review compared to 1.0 per cent growth in 2020. World trade volume increased by 9.3 per cent in 2021
compared to a contraction of 8.2 per cent in 2020, reflecting increased demand and activities in the economy. Global inflation rose from 3.2 per cent in 2020 to 4.3 per cent in 2021 due to increase in prices of energy and agricultural commodities, and supply chain disruptions. Unemployment rate eased from 6.6 per cent in 2020 to 6.2 per cent in 2021 as businesses reopened and the number of working hours increased, after relaxation of COVID-19 restrictions.
Economic Performance
Real Gross Domestic Product (GDP) is estimated to have grown by 7.5 per cent in 2021 compared to a contraction of 0.3 per cent in 2020. Most economic activities recorded positive growths except in Agriculture, Forestry and Fishing activities which contracted
by 0.2 per cent in the review period. Activities that were affected more severely by the pandemic in
2020 such as Education and Accommodation and Food Service grew faster than those that were less severely affected. Economic growth in 2021 was supported by improved performance in key sectors of the economy including; Manufacturing (6.9%), Wholesale and Retail Trade (7.9%), Real Estate (6.7%), Transportation and Storage (7.2%), and Financial and insurance activities (12.5%).
In the review period, monetary policy was premised on the need to accelerate economic recovery after a slowdown witnessed in most of the economic activities in 2020. Central Bank Rate (CBR) was maintained at 7.00 per cent throughout 2021. Overall liquidity and broad money grew by 9.48 per cent and 6.1 per cent, respectively in 2021. Agriculture remained the dorminant sector, accounting for about 22.4 per cent of the overall GDP in 2021. Industry related activities and service activities accounted for about 17.0 per cent and 60.6 per cent, respectively in 2021. Nominal GDP increased from KSh 10,716.0 billion in 2020 to KSh 12,098.2 billion in 2021 while Gross National Disposable Income increased from KSh 11,058.4 billion in 2020 to KSh 12,588.2 billion in 2021. Gross domestic per capita increased by 11.4 per cent from KSh 220,132.2 in 2020 to KSh 245,145 in 2021.
Employment, Earnings and Consumer Prices
During the review period, total new jobs created in the economy were 926.1 thousand of which 172.3 thousand were in the modern sector, while 753.8 thousand were in the informal sector. Wage employment in the private sector increased by 6.8 per cent to 1,984.2 thousand persons in 2021 from 1,858.0 thousand persons in 2020. Within the public sector, wage employment increased from 884.6 thousand persons in 2020 to 923.1 thousand persons in 2021. The nominal wage bill for private and public sectors rose by 8.4 per cent from KSh 2,218.7 billion
Agriculture remained the dorminant sector, accounting for about 22.4 percent of the overall GDP in 2021. Industry related activities and service activities accounted for about 17.0 per cent and 60.6 per cent, respectively in 2021