Outlook for 2011-15

• The coalition government between the president, Mwai Kibaki, and the prime minister, Raila Odinga, will remain intact until the next election, in 2012.
• Mr Kibaki cannot stand for a third term and there will be fierce competition to replace him. Mr Odinga is likely to stand for the Orange Democratic Movement (ODM) and would appear to have a fair chance of victory.
• The government will remain committed to pro-market reforms, including deregulation, privatisation and trade liberalisation, but some will be delayed because of the packed legislative agenda.
• Real GDP is expected to continue to grow, from 4.5% in 2010 to 5.4% in 2011, as domestic conditions improve. Growth will peak at 5.8% in 2012 before subsiding owing to ongoing structural constraints in 2013-15.
• Inflation is expected to edge up to 5.7% in 2011, from 3.9% in 2010, as demand growth quickens. Inflation will remain in the 5.5-6% range in 2012-15.
• The current-account deficit will shrink from 5.5% of GDP in 2010 to 5% of GDP in 2011, owing mainly to a rise in GDP. The gap will narrow further in 2012-15 owing to faster growth in export earnings and services inflows

Monthly review

• The International Criminal Court( ICC) has named six prominent Kenyans as being responsible for post-election violence in 2008. The ICC pre-trial chamber may now issue summons or warrants, or decide not to proceed.
• Unless the ICC drops the case, there seems little doubt that the legal process will deliver a serious blow to the political ambitions of Uhuru Kenyatta and William Ruto, who were eyeing a bid for the presidency at the 2012 election.
• The government imposed fuel price controls in December, setting maximum mark-ups at the retail and wholesale level, in a bid to stem rising prices, but the restrictions could backfire by deterring investment in new capacity.
• Strict new controls on the sale of alcoholic beverages, including the imposition of narrow licensing hours, are pending, which could threaten the vital hospitality and tourism sectors.
• Inflation jumped to 3.8% year on year in November, the highest for six months, owing to rising food and fuel prices, although a sharp fall in telecoms tariffs following price wars is offering some relief.
• A visit by South Africa's deputy president has highlighted growing trade with Kenya. South Africa was Kenya's fourth-largest supplier in 2009 but sales slipped in 2010 owing to adverse currency movements.