THE US government shutdown will not have a major impact on Kenya's economy for now due to a stable macroeconomic environment, Treasury Cabinet Secretary Henry Rotich has said.
Speaking at his office yesterday, Rotich said he also expects the economic growth to hit the six per cent target for 2013 adding that the second half of the year will be better business-wise after a slow down in quarter one because of elections and transition into devolved government structure. In quarter two, the economy grew by 4.3 per cent according to latest statistics. The average growth for first half 2013 is 4.9 per cent.
"If you look at the time when there was the 2008 financial crisis, Kenya's economy has always been resilient," said Rotich. "Overall we emerged strong."
The Cabinet Secretary said the country's economic policies are sound enough to cushion the economy against any external shocks adding that in the short term the US budget impasse will not greatly affect exports and remittances into the country.
On Monday, the US federal government ran out of money to run its operations after a deadlock between Democrats and Republicans who failed to agree on spending bill to finance the government; seen as a bid by the Republicans to delay implementation or force amendments to the country's health care law commonly referred to as 'Obamacare'.
Two days later, countries around the globe expressed their anxiety over this situation which according to several analysts could hit many struggling economies.
Global markets were relatively resilient but analysts have also warned that a prolonged shutdown could have serious trickle down effects to the world economy.
Rotich said that Kenya will nonetheless see further growth of the economy in second half driven by service and agriculture sectors. He also cited the improved operations at the Mombasa port which is East Africa's largest, as the other major contributor to the expected second half growth.