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"content": "private sector (both large and small) businesses to thrive and avail more revenue for financing priority development. While these measures will secure growth, we also need to ensure that the gains from growth are widely distributed through sustainable employment in order to guarantee durable reduction in poverty. In addition, measures to address socio-economic inequalities, improving the countryâs human capital, and inculcating national cohesion are vital for long-term stability and prosperity. To this end, the Government will continue to implement the socio-economic priority programmes articulated in Vision 2030âs first MTP, as well as increased devolution of resources for the development at the local levels, again, in line with our new Constitution. Mr. Speaker, Sir, turning to the economic outlook, we note that global recovery is gaining momentum, supported by improvement in financial market conditions, buoyant activity in emerging and developing economies, and growing confidence also in some of the advanced countries. The global output is projected to grow at about 4.5 per cent in 2011/2012, down modestly from 5 per cent in 2010. In advanced as well as emerging and developing economies, real GDP is expected to grow by about 2.5 per cent and 6.5 per cent respectively. As in the rest of the world, growth in Sub-Saharan Africa is projected to stay high, reflecting sustained strength in domestic demand and rising global demand for commodities. Real GDP growth for the Sub-Saharan Africa economies is projected at 5.5 per cent in 2011 and 5.9 per cent in 2012, up from 5 per cent in 2010. The growth of Kenyaâs major trading partners in the East African region such as Uganda, Tanzania and Rwanda, is projected to remain strong in the range of 6-7 per cent in 2011and 2012. This is expected to boost exports into the region and to earn our economy foreign exchange. Mr. Speaker, Sir, on the domestic front, the recently released Economic Survey for 2011 indicates that our economy expanded by 5.6 per cent in 2010, up from 2.6 per cent in 2009 and 1.5 per cent in 2008. The growth was broad-based covering all sectors of the economy. Agriculture and forestry sector rebounded strongly, posting a growth rate of 5.3 per cent, after depressed performance in the last two consecutive years. Increased investment in physical infrastructure by the Government further boosted activity in the building and construction sector. This recovery was against a backdrop of macro- economic stability as reflected in low inflation and interest, and stable exchange rate. On the external front, the strong domestic demand and high oil prices raised our import bill and, as a result, weakened our external payment position with the current account deficit reaching 8.5 per cent of GDP in 2010. Looking forward, the economic prospects for 2011 remain strong but the impact of high fuel and commodity prices, as well as delayed rains is a source of concern. We see continued strong credit to private sector, increasing Foreign Direct Investment, improved tourism and construction, and strong export growth with better prices and favourable exchange rate helping to sustain growth, in spite of the shocks related to high fuel and food prices, and delayed planting season. Overall, we expect a real GDP growth of 5.3 per cent in 2011, rising steadily to 6.1 per cent in 2012. This translates to 5.7 per cent for the Financial Year 2011/2012 or 0.4 per cent lower than the projected growth of 6.1 per cent at the time we prepared the 2011 Budget Policy Statement. The lower growth forecast is on account of the emerging evidence on the likely adverse impact of high fuel and food prices on our economy."
}