INCOME DRAWDOWN FUND PERFORMANCE
The overall Fund return on investment for the third quarter ended 30th September 2024 stood at -0.16% compared to a return of 8.7% recorded in the second quarter ended 30th June 2024. The Fund value increased from Kshs 1.57 billion as of 30th June 2024 to Kshs 1.62 billion as of 30th September 2024 due to additional contributions.
Outlook
In 2024, the global economy experienced modest growth amid inflationary pressures, geopolitical challenges, and climate disruptions. The U.S. economy grew by 2.5%, driven by strong consumer spending, while the Eurozone stagnated at 1.0% due to high energy costs and tight monetary policies. Emerging markets recorded 4.0% growth but struggled with high debt burdens and borrowing costs. Kenya’s economy expanded by 4.0% in Q3 2024, slower than the 5.9% in Q3 2023, with agriculture as the key driver.
2025 Outlook:
- Global growth is projected at 2.7%, depending on geopolitical stability and policy coordination.
- Kenya’s GDP is expected to grow by 5.4%, contingent on fiscal reforms and political stability.
- The Kenyan shilling will likely experience moderate depreciation, supported by remittances and forex reserves.
- Inflation is expected to remain within CBK’s target range (2.5%-7.5%) due to lower fuel and electricity costs.
- Interest rates may decline gradually with reduced domestic borrowing, but government financing needs could slow this trend.
- Treasury bonds are expected to perform well with declining rates and reduced government borrowing.
- The equities market is projected to rise, supported by strong corporate earnings and increased investor confidence.
- Offshore markets could benefit from U.S. economic policies, though KES stability and rising imports will influence performance.