Kenyan central bank sees Brexit as biggest risk facing economy

No economy in the world will be immune to the volatility that would follow a decision by Britain to exit from the European Union, Kenyan central bank Governor Patrick Njoroge said.

East Africa’s biggest economy won’t be spared the “shock waves” that could reverberate around the world should voters in the U.K. decide in a June 23 referendum to withdraw from the economic bloc, Njoroge told reporters in the Kenyan capital, Nairobi, on Thursday.

“All I can tell you is that it will be a disaster,” he said. “We are connected to all external markets. If there is any volatility there, it will affect us. We haven’t taken out insurance on volatility, so markets will punish everybody, because there will be nowhere to hide.”

Barring a so-called Brexit, Njoroge said he was more optimistic about the prospects for Kenya’s $61 billion economy, whose biggest exports to Europe are tea and cut flowers. Kenya’s gross domestic product expanded by 5.6 percent in 2015 and the pace should pick up to about 6.1 percent this year, according to Treasury estimates.

– Bloomberg