(Bloomberg) -- Kenya’s economy is projected to expand 5% this year as favorable weather conditions boost agricultural output, according to the World Bank. 

The growth rate is expected to accelerate to 5.2% in 2024 and 5.3% the following year, driven by a decline in global commodity prices and robust private investment, the lender said in its Kenya Economic Update published on Wednesday. Gross domestic product expanded 4.8% last year, down from 7.5% in 2021.

Heavy rains are likely to increase agricultural yields and boost generation of cheap hydro-power, it said in its report. It sees economic growth being moderated by a slowdown in public investment, ongoing fiscal consolidation, higher electricity tariffs and tight monetary policy.

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The World Bank also expects the education, hotels and accommodation, and transport sectors to strengthen as the economy continues to benefit from the post-coronavirus pandemic environment of low infections and the easing of travel restrictions.

The lender forecasts that inflation will average 7.8%, up from 7.6% in 2022, driven by a depreciation in the shilling and higher fuel and electricity prices. The inflation rate is expected to decline to 5.7% between 2024 and 2025, “leading to a loose monetary policy in the medium term,” it said.

Kenya’s debt-to-GDP ratio is projected to reach 64.8% this month, 2.6 percentage points lower than a year ago, helped by government’s plans to raise revenue and a slow down in its uptake of debt, the World Bank said.

Risks to growth in Eastern Africa’s second-biggest economy include below-average rainfall, political tensions and a further tightening of monetary policy by major central banks, the World Bank said.

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