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Kenya central bank sees 3.6 pct growth in 2009

Published 03/17/2009, 02:08 AM

NAIROBI, March 17 (Reuters) - Kenya's central bank has projected at least 3.6 percent growth for east Africa's largest economy in 2009, depending on how long the global financial crisis lasts.

Economic growth last year is estimated at 2.0-2.5 percent due to months of stunted activity that followed deadly post-election violence across the country. The effects of that fighting were compounded by drought, high prices and the global crisis.

"The (2009) projection is 3.6 percent," Central Bank Governor Njuguna Ndung'u told reporters late on Monday.

"All that is premised on the basis of if we solve the global crisis. Once we see a recovery in the industrialised countries, for us perhaps 3.6 percent will be the minimum, so we may do better."

The governor said Kenya's greatest challenge was providing enough food. Some 10 million people face food shortages due to drought and the disruption to production following the post-election fighting.

"Get supply of food and everything else will be working," Ndung'u said.

Finance Minister Uhuru Kenyatta said earlier this month he expected the economy to expand by 4-4.5 percent this year.

He said on Monday that for Kenya's growth to reach 10 percent by 2012, in line with an official Vision 2030 economic blueprint, investments and savings have to rise, too.

"To deliver the Vision 2030 growth objective, investment as a proportion of gross domestic product is expected to rise from the current level of 20 percent to 42 percent by 2012/13," Kenyatta told donors.

National savings as a proportion of GDP should also increase to 26 percent in 2012/13 from 16 percent now, Kenyatta said.

Kenya would invest in social sectors and infrastructure to speed up development, he added. (Reporting by Duncan Miriri; editing by Helen Nyambura-Mwaura)

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