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Over the last decade, Kenya's society and economy have changed fundamentally and these deep trends will continue. Rapid population growth and urbanization will create many new challenges which need to be managed well to support Kenya's economic take-off in the medium-term. This fourth edition of the Kenya economic update argues that Kenya can turn the tide in turbulent times and make the most of the ongoing structural shifts. In 2011, Kenya will need to address short-term domestic and international shocks, including higher inflation, pressures on the exchange rate and, most importantly, a volatile political environment. The government will need to navigate through these shocks successfully and to continue with its economic reform program to achieve higher growth. At the same time, the government will be making major strategic decisions in Kenya's decentralization architecture which will shape the medium-term development prospects of the country. Economic success is possible, as the 5.6 percent growth in 2010 has shown. If growth will accelerate to an average of 6 percent this decade, Kenya will achieve middle income country status by 2019.
