World Bank2017-05-192017-05-192012-06https://hdl.handle.net/10986/26666In 2012, Kenya's economy has been on a tightrope. Policy makers have had to walk a fine line between stabilizing the economy and maintaining the growth momentum. While inflation has declined, the exchange rate stabilized, and the fiscal position improved, fundamental economic imbalances continue to make Kenya vulnerable to shocks. In the absence of economic and social turbulence, Kenya should grow at 5 percent in 2012 and 2013, which will still be substantially below its neighbors. Kenya has been benefitting from the integration and growth momentum in the East African Community (EAC), which has become one of the most vibrant economic regions in the world. However, despite impressive increases in trade between the five EAC partners in recent years, there is still a large untapped potential. EAC trade can increase several-fold if unnecessary restrictions in the trade of goods and services particularly nontariff barriers were removed.en-USCC BY 3.0 IGOADVERSE EFFECTSAGGREGATE DEMANDAGRICULTURAL OUTPUTAGRICULTUREANNUAL GROWTHASSETSAVERAGE OIL PRICEBALANCE OF PAYMENTBANK LENDINGBANKING INDUSTRYBANKING SECTORBILLBUDGET DEFICITCAPITAL ACCOUNTCAPITAL MARKETSCAPITAL OUTFLOWSCENTRAL BANKCOLLATERALCOMMERCIAL BANKCOMMODITY PRICECOMPARATIVE ADVANTAGECOMPETITIVE ADVANTAGECOMPETITIVENESSCONSOLIDATIONCONSUMER DURABLESCONSUMER PROTECTIONCONSUMERSCONSUMPTIONCONSUMPTION EXPENDITURECORE INFLATIONCOSTSCREDIBILITYCREDITCURRENCY FLOWSCURRENCY INFLOWSCURRENCY SUBSTITUTIONCURRENT ACCOUNTCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITCUSTOMS UNIONDEBTDECENTRALIZATIONDEMAND GROWTHDEMANDSDEPOSITDEVELOPMENTDEVELOPMENT ASSISTANCEDOMESTIC CONSUMPTIONDOMESTIC CURRENCYDOMESTIC MARKETDOMESTIC MONEY MARKETSDOMESTIC PRICESDOMESTIC SAVINGSDRAG ON GROWTHECONOMIC GROWTHECONOMIC IMBALANCESECONOMIC OUTLOOKECONOMIC PERFORMANCEECONOMIC REGIONSECONOMIESECONOMIES OF SCALEECONOMYEFFECTIVE EXCHANGE RATEEURO ZONEEXCHANGEEXCHANGE RATE STABILITYEXCHANGE RATE VOLATILITYEXCHANGE RATESEXPECTATIONSEXPORT COMMODITIESEXPORT DIVERSIFICATIONEXPORT EARNINGSEXPORT GROWTHEXPORT MARKETSEXPORT VOLUMEEXPORTEREXPORTERSEXPORTSEXTERNAL BALANCEEXTERNAL BORROWINGEXTERNAL DEFICITSEXTERNAL POSITIONEXTERNAL SHOCKEXTERNAL TRADEFAILURESFINANCIAL MARKETFISCAL BALANCEFISCAL DEFICITFISCAL DISCIPLINEFISCAL POLICYFISCAL POSITIONFOOD PRICESFORECASTSFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE INFLOWSFOREIGN EXCHANGE RATESFOREIGN EXCHANGE RESERVESFREE TRADEGDPGDP PER CAPITAGOODSGOVERNMENT BORROWINGGOVERNMENT EXPENDITURESGOVERNMENT SECURITYGROSS DOMESTIC PRODUCTGROWTH RATEHIGH INFLATIONIMBALANCESIMPORTIMPORT CONTENTIMPORT GROWTHIMPORT LICENSINGINCENTIVESINCOMEINCOME GROUPSINFLATIONINFLATIONARY PRESSUREINPUTSINTERESTINTEREST RATEINTEREST RATE DIFFERENTIALINTEREST RATE HIKESINTEREST RATE POLICYINTERNATIONAL MARKETSINVESTMENTLAGSLENDINGLEVERAGELIQUIDITYMACROECONOMIC INSTABILITYMACROECONOMIC STABILITYMAJOR CURRENCIESMARKET RATESMICRO-FINANCE INSTITUTIONMONETARY AUTHORITIESMONETARY POLICYMONETARY UNIONMONEYMONEY MARKETMONEY SUPPLYNATURAL RESOURCESNET EXPORTSNOMINAL EXCHANGE RATEOIL PRICEOUTCOMESPARALLEL MARKETSPAYMENTSPER CAPITA INCOMEPOTENTIAL OUTPUTPOVERTY LEVELSPOVERTY REDUCTIONPRICE CEILINGSPRICE FLUCTUATIONSPRICE INCREASEPRICE OF OILPRICESPRIVATE CONSUMPTIONPRIVATE INVESTMENTPRIVATE SAVINGSPRODUCTIONPUBLIC DEBTPUBLIC EXPENDITUREPUBLIC INVESTMENTPUBLIC SPENDINGQUOTASRAPID GROWTHREAL APPRECIATIONREAL EFFECTIVE EXCHANGE RATEREAL EXCHANGE RATEREAL EXCHANGE RATE APPRECIATIONREGIONAL GROWTHREGULATORY FRAMEWORKSREGULATORY REFORMREMITTANCESRESERVE REQUIREMENTSREVENUERISKSAVINGSSHORT-TERM INFLOWSSLOW GROWTHSLOWDOWNSTABLE EXCHANGE RATESTRUCTURAL REFORMSSUPPLY CONSTRAINTSSURPLUSSURPLUS COUNTRIESTARIFF BARRIERSTARIFF REDUCTIONTIGHT MONETARY POLICYTOTAL DEBTTOTAL IMPORTTOTAL REVENUETRADABLE GOODSTRADETRADE BALANCETRADE BARRIERSTRADE DEFICITTRADE LIBERALIZATIONTRADE NEGOTIATIONSTRADING PARTNERSTREASURY BILLTRENDSUNCERTAINTIESUNEMPLOYMENTVALUEVALUE ADDEDWAGESWEIGHTWORLD DEVELOPMENT INDICATORSWTOReportWorld Bank10.1596/26666