Kenya downplays Moody's downgrade, saying economy on path to recovery-Xinhua

Kenya downplays Moody's downgrade, saying economy on path to recovery

Source: Xinhua| 2023-05-23 23:17:00|Editor: huaxia

NAIROBI, May 23 (Xinhua) -- Kenya is confident that it has put in place strong interventions that have set the country on the path to sustainable economic recovery, the National Treasury said Tuesday in response to the global ratings agency, Moody's downgrade.

Moody on May 12 downgraded Kenya's "long-term foreign currency and local currency issuer ratings and senior unsecured debt ratings from B2 to B3 on rising liquidity risks."

Njuguna Ndung'u, cabinet secretary of the National Treasury and Economic Planning, however, said in a statement issued in Nairobi, the capital of Kenya, that the country's growth prospects remain positive, supported by favorable weather conditions and subsidized fertilizer initiative, which are expected to boost agricultural production and improve food security.

Ndung'u observed that there is continued economic recovery across various sectors due to the easing of the economic impact of the COVID-19 pandemic.

He said this view is corroborated by Kristalina Georgieva, the International Monetary Fund (IMF) managing director, who visited Kenya and noted the strong economic performance in the face of multiple external persistent shocks as well as domestic ones.

"Kenya has moderate debt carrying capacity and its portfolio of public debt is sustainable," the official said.

He added that inflation, which peaked at 9.6 percent in October 2022, at the height of severe drought and commodity shocks in the global market, is down to 7.9 percent in April, and there is the easing of global commodity prices, especially oil and food.

According to Ndung'u, there is a planned pipeline of foreign currency loans from the IMF, World Bank and syndicated loans that will positively impact market liquidity.

He assured that Kenya would not default on the upcoming 2024 Eurobond maturity payments, noting that the government has received more than 300 proposals offering various liability management solutions, as it embarks on effective liability management in the next fiscal year.