This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Economic Outlook Growth
In 2014, real GDP grew by 5.3% and is expected to grow by between 6.5-7% in 2015 based on an outlook of infrastructure development, subsidised energy cost, increased agricultural production and robust fiscal and monetary policies. The real GDP growth rate as reported by the National Bureau of Statistics (NBS) in the first, second and third quarters of 2014 was 4.5%, 5.7% and 5.5% respectively. This has been a good achievement relative to the Budget. The shilling has devalued against the dollar by 6.9% YTD to KES 97.21/USD prompting the CBK to increase the CBR rate by 150bps to 10.0%. The Committee noted that the decline in overall inflation in May 2015 was largely a reflection of significant decreases in the prices of a number of food items following the onset of the long rains. However, overall inflation remained within the upper bound of the Government target range of 2.5% on either side of the medium-term target of 5%.
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