Role of the state in the macroeconomy

Extract 1: Kenya's GDP per capita (current US$) rose from about $1080 in 2010 to about $2100 in 2022. Its HDI is 0.60, ranked 146th in the world. Around a third of Kenyans live below the international poverty line. Agriculture employs more than half of the workforce; tea, coffee, cut flowers and horticulture are major exports. Extract 2: The mobile money service M-Pesa allows people without bank accounts to send money, save and borrow by phone. Studies suggest it helped lift around 2% of Kenyan households out of poverty, especially households headed by women. Remittances from Kenyans working abroad exceed $4 billion a year. Extract 3: Kenya's government has borrowed heavily to fund infrastructure, including a Chinese-financed railway from Mombasa to Nairobi. Public debt has risen to around 70% of GDP and interest payments take a large share of tax revenue. The IMF has supported Kenya on condition of tax rises and spending cuts.

Extract 1: UK output per hour worked grew by around 2% a year in the decade before 2008. Between 2008 and 2023 it grew by only about 7% in total. Business investment as a share of GDP is lower than in most G7 economies. Extract 2: Real GDP growth was around 0.1% in 2023 and the economy entered a technical recession in the second half of the year. Economists estimated a small negative output gap. Inflation was falling back towards the 2% target, while public sector net debt was close to 100% of GDP. Extract 3: Proposals to raise growth include planning reform to speed up building of homes and infrastructure, permanent full expensing of investment for tax purposes, more spending on skills and childcare, and closer trading links with the EU.