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East African economies face a decline in the value of goods and services produced in 12 months to December 31, 2023, a new report said, citing a challenging macroeconomic environment characterised by rising inflation, depreciating currencies, rising commodity prices and tightened global financial conditions.
Financial advisers at the consultant firm Deloitte expect the overall GDP growth rate for the five EAC partners — Kenya, Uganda, Tanzania, Rwanda and the Democratic Republic of Congo (DRC) — and Ethiopia to slow down to 5,7 percent this year, from 6,1 percent in 2022.
The consultants said the socioeconomic shocks experienced in the East African region in 2022, including drought, political instability, commodity price hikes and currency depreciation are expected to feed into weaker economic activity and high levels of inflation in 2023.
“Despite these headwinds, we remain cautiously optimistic about the outlook for 2024 for the region, with expectations of abating macroeconomic challenges and better global growth outcomes in the medium term,” says the report dated December 13.
“Growth is expected to recover in 2024, with real GDP growth averaging 6,3 percent, driven by a full recovery of the services sector and improved export performance.”
The report says the growth outlook could be affected by commodity price volatility, rising debt service costs and the fast pace of currency depreciation in most East African countries. — The East African.
Online Reporter