Former Trade Cabinet Secretary Moses Kuria has issued a stark warning about the economic outlook for April, describing it as potentially “the toughest and most brutal month of all times” due to the escalating geopolitical tensions linked to the Iran conflict.
Kuria cautioned that the full impact of the war will begin to bite this month, particularly through disruptions in global energy supply chains.
According to former Gatundu South Member of Parliament, the ripple effects will be felt worldwide, with developing economies such as Kenya facing significant pressure.
“April will be the toughest and most brutal month of all times. The real effects of the regrettable war in Iran will take toll on the global economy,” said Kuria.
Hormuz Strait Crisis Threatens Global Energy Supply
At the center of the looming crisis is the strategic Strait of Hormuz, a key artery for global oil transportation. Any disruption in this corridor significantly affects the supply of crude oil to international markets.
Kuria warned that “Hormuz effects” stemming from supply disruptions will hammer the global economy, pushing energy costs sharply higher and triggering inflation across multiple sectors.
Kenyan consumers are likely to feel the impact directly at the pump. Kuria projected that fuel prices could surge to between KSh 230 and KSh 250 per litre, a move that would significantly raise the cost of living and doing business.
“The Hormuz effects of energy supply disruptions will hammer the global economy. In countries like Kenya pump prices will end up in the region of Ksh 230 to Ksh 250 per litre. There will be pressure and temptations to apply knee jerk and short termist solutions such as subsidies and foregoing tax revenues,” Kuria predicted.
Such an increase would have a cascading effect on transport, manufacturing, and food prices, further squeezing households already grappling with economic challenges.
Despite the anticipated pressure, Kuria strongly cautioned the government against adopting short-term solutions such as fuel subsidies or cutting tax revenues to cushion consumers.
He warned that such “knee-jerk” responses could undermine Kenya’s macroeconomic stability, potentially reversing gains made in recent years.
According to him, “messing up with the macroeconomic gains achieved so far will come with consequences that cannot be undone even two years after the war.”
In his concluding remarks, Kuria advised Kenyans to prepare for difficult economic conditions, suggesting that the country may have no option but to endure the inflationary pressures triggered by global events.
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