Kenya has enjoyed strong growth in recent years and external imbalances have narrowed, strengthening resilience to shocks. The business environment continues to improve, supporting private investment. However, a severe drought, an extended presidential election, and weak bank lending—due in part to interest rate controls—slowed growth in 2017. With better weather and a stable political environment, growth should improve in 2018. But public debt has risen as revenue shortfalls have not been matched by spending cuts.
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