Kenya’s Q3 Economic Growth Slows to 5.7 percent

Kenya’s economy expanded by 5.7 percent in the third quarter compared with 6.0 percent in the same period in 2015, the Kenyan National Bureau of statistics office said on Friday.

“Generally, the economic growth was well spread although most of the sectors of the economy recorded slowed growths. Accommodation and restaurants; transport and storage; wholesale and retail trade; information and communication; health; professional, administrative and support; and public administration registered improved growths during the review quarter”

According to KNBS, the growth of the agriculture, forestry and fishing sector is estimated to have slowed to 3.9 percent during the quarter under review compared to a growth of 5.5 during the same quarter in 2015. Activities of the manufacturing and the construction industries recorded notable slowdown in growths.

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Agriculture, Forestry and Fishing

The sector’s performance in the third quarter of 2016 was notably subdued at 3.9 per cent compared to 5.5 per cent growth recorded in the same quarter of 2015 mainly attributable to constrained growths in some key activities in the sector coupled with significant declines in the level of output in some subsectors.

Growth in the sector was dampened by poor performance in the production of tea and coffee that declined by 0.3 and 4.0 per cent, respectively in the period under review.

Read:  Agriculture to Boost Kenya’s GDP Expansion to 5.6pc in 2016 -World Bank

Manufacturing

During the review period, the sector registered a decelerated growth of 1.9 per cent compared to a growth of 3.3 per in a similar quarter in 2015.

Construction

The construction sector grew by 9.3 per cent in the third quarter of 2016 compared to 15.6 per cent growth in the same quarter of 2015. The slowed growth was mirrored in the consumption of cement that decelerated from 11.0 per cent in the third quarter of 2015 to 5.3 per cent in the review quarter.

Electricity and Water

The electricity and water supply sector recorded a decelerated growth of 7.0 per cent during the period under review compared a 10.0 per cent growth reported in third quarter of 2016. This was mainly on account of a 4.1 per cent decline in the production of electricity from geothermal sources.

Financial Sector

The financial sector recorded a growth of 6.1 per cent during the third quarter 2016 compared to a growth of 10.3 per cent registered in the same quarter of 2015.

“The amendment of the Banking Act in August 2016 to cap the lending rates to a maximum of 4.0 per cent above the Central Bank Rate (CBR) resulted to a substantial decline in the interest rates during the month of September to 13.84 percent from 16.75 per cent in the same month of 2015.

The current account deficit narrowed by 10.4 per cent to a deficit KSh 100,687 million in the third quarter of 2016 from a deficit of KSh 112,377 million during the same quarter of 2015. The overall balance of payments also improved from a deficit of KSh 51,356 million in the third quarter of 2015 to KSh 5,710 million during the quarter under review.”

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