(Adds inflation risks, background)
NAIROBI, June 26 Kenya will grow slower than
expected in 2014, the World Bank said on Thursday, citing poor
rains and growing insecurity in east Africa's biggest economy.
The World Bank said Kenya's economy would expand 4.7 percent
this year, shaving 0.5 percentage points off its previous
estimate six months ago. The bank projects growth to remain the
same in 2015.
The cuts suggest growth in Kenya will lag its east African
neighbours. The government earlier this month put Kenya's growth
at 5.8 percent this year and 6.4 percent in 2015.
"The new projections reflect the effects of the drought, the
deteriorating security situation, low level of budget execution,
and tight global credit as the U.S. Federal Reserve winds down
its expansive monetary policy," the bank said in its June
Economic Update for Kenya.
The bank also said inflationary pressures were building and
warned that inadequate rainfall seen this year could create
macroeconomic instability in 2014.
"Higher food and electricity prices are expected to raise
inflation above its target level, putting macroeconomic
stability, private investment, and projected growth at risk,"
the bank added.
(Reporting by Drazen Jorgic; Editing by George Obulutsa and