NAIROBI, Jan. 11 (Xinhua) -- Kenya's economic damage caused by COVID-19 will result in a downturn by 2023 that leaves the gross domestic product (GDP) to about 9 percent below the pre-crisis forecast, says a joint report released by economic think tanks Tuesday.
According to the Macro Fiscal Analytic Snapshot (MFAS) report by the Institute of Public Finance Kenya (IPFK) and London-based Oxford Policy Management (OPM), prior to the COVID-19 pandemic, Kenya had been experiencing stable and moderately strong growth since 2008, averaging 5.6 percent per year.
The annual report seeks to facilitate an informed public discourse on Kenya's economy and allocation as well as the use of public finances as an effective way of policymaking.
Since the first COVID-19 case was identified in Kenya in March 2020, the country had reported 313,677 confirmed COVID-19 cases as of Monday, with 5,462 deaths. And 10.69 million people have been vaccinated.
The report notes that fiscal constraints resulted in a very modest response from the government to support the economy, households and informal enterprises from the impact of the COVID-19 pandemic, leading to more than two years of progress being lost on poverty reduction.
According to the report, external development finance has helped ease Kenya's fiscal constraints in the past, but further support will be required over the medium term, to help the east African nation deal with the lasting impact of the pandemic.
The findings indicate that Kenya is facing a difficult period of fiscal adjustment, predicated on a recovery to revenue performance and painful expenditure cuts.
The survey shows that several years of loose fiscal policy combined with revenue optimism contributed to a large fiscal deficit resulting in the government being unable to mount a significant fiscal response to the crisis, precisely at the time that it would have been beneficial.