Kenya’s Economy In Q3: The Growth Story Sang A melody, And Agriculture Took Center Stage

The Kenyan economy is estimated to grow by 5.0 percent in 2023, 20 bps higher than the 4.8 percent growth recorded in 2022.

More specifically, the Kenyan economy grew by 5.9 percent in 3Q23, a 40bps and 160bps increase from 5.5 percent and 4.3 percent in 2Q23 and 3Q22, respectively.

The growth was mainly due to the resurgence in the agricultural sector following the relatively favorable weather during the year – the sector grew by 6.7 percent in 3Q23, from a 1.3 percent contraction in 3Q22.

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The service sector remained the largest contributor to GDP at 58.9% with a weighted growth rate of 4.8% – the financial & insurance sub-sectors contributed the most to the growth having recorded a 14.7% and 1.5% real growth and weighted growth rate respectively.

The primary sector contributed 15.6 percent with a weighted growth of 1.0 percent. Under the segment, the agriculture sub-sector remained the largest contributor to GDP at 14.7 percent, a 10bps increase from its contribution in 3Q22 but a 500bps decline from 2Q23.

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The world economy is estimated to slow to 3.0% in 2023, from 3.5% recorded in 2022. The slowdown is mainly attributed to;

• Elevated inflationary pressures emanating from higher energy prices,
• Tighter monetary policy space aimed at anchoring inflation.

The deceleration is more noticeable in advanced economies than in emerging and developing markets. The Sub-saharan African economy is expected to have grown by 3.3 percent, from 4.0 percent in 2022.

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