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RESTRAINED

Kenya's economy slows down in first three months, GDP growth at 5.6 per cent

The figure confirm that the economy activity subdued by 0.9 percentage point compared to 2018

In Summary

• Kenya's economy expanded by 5.6 per cent in the first quarter of 2019, the government said in the first Gross Domestic Product (GDP) for the year.

• Kenya National Bureau of Statistics said the slowdown was due to a slowdown in agricultural activities following delay in the onset of long rains.

Economy
Economy

Kenya's economy expanded by 5.6 per cent in the first quarter of 2019, the government said in the first Gross Domestic Product (GDP) for the year.

The figure confirms the economy that experienced a growth in 2018, was depressed in the period, compared to 6.5 per cent performance recorded in the same quarter of 2018.

Kenya National Bureau of Statistics said the slowdown was due to a slowdown in agricultural activities following delay in the onset of long rains.

The agriculture, forestry and fishing sector grew by 5.3 per cent compared to a growth of 7.5 per cent of similar quarter in 2018.

“The slowdown in agricultural growth somewhat affected agro-processing and consequently led to slowed manufacturing activities during the review period,” KNBS stated.

This though, the sector being the main supporter for 2018's growth of GDP growth to 6.3 percent in 2018, helped by manufacturing and transport sectors.

The statistics office showed that other sectors also experienced a contraction amid the continued monetary tightening by high borrowing rates and need by national treasury to down on spending reduce the fiscal deficit.

The manufacturing sector grown by 3.2 per cent over the period, compared to a growth of 3.8 per cent of 2018.

In the manufacture of foods products, growth was curtailed by manufacture of sugar, prepared and preserved fish and processing of coffee. 

Similarly, manufacture of cement and manufacture of leather products recorded contractions in the review period.

“Credit extended to the manufacturing sector by commercial banks expanded by 7.1 per cent in the period under review compared to a growth of 12.1 per cent in the first quarter of 2018,” it said.

The construction sector grew by 5.6 per cent in the review quarter compared to a growth of 6.6 per cent in the corresponding quarter.

Consumption of cement, the indicator of construction activities declined by 3.1 per cent in the review period, with Credit advanced declining by 1.0 per cent.

However, value of imported construction related materials increased from Sh7.1 billion in the first quarter of 2018 to Sh12.4 billion in the quarter under review.

The transportation and storage sector also recorded a slower growth of 6.7 per cent, compared to 8.5 per cent registered over same period in 2018, supported by increased volume of port throughput that grew by 8.7 per cent during the quarter to stand at 8.3 million tonnes.

Loans advanced to the sector decreased by 0.7 per cent to Sh513.5 billion in the period under review.

Accommodation and Food Service activities expanded by 10.1 per cent, representing a decline from 13.1 per cent in 2018.

The factors performance were held against a strengthened Kenya shilling against all its major trading currencies.

The Shilling averaged at 100.73 against the dollar in the quarter compared to 101.83 in Q1 2018, despite in the course of trade tensions between US and China and prolonged uncertainty regarding Brexit negotiations and financial market volatility.

The average inflation in the period under review eased to 4.40 per cent from 4.49 per cent in the first quarter of 2018.