The economy grew 5.8 per cent in the third quarter of 2015, driven by construction and agriculture and helped by a more gradual decline in tourism compared to last year, the statistics office said on Wednesday.
Economic growth for the same period last year was 5.2 per cent.
Inflation rose to 8.01 per cent year-on-year in December, from 7.32 per cent the previous month, the statistics office said.
The government has repeatedly lowered its growth forecast in recent months from an original prediction of 7 per cent.
Earlier in December,
Treasury Cabinet Secretary Henry Rotich
trimmed the 2015 economic growth forecast to a range of 5.5 to 6 per cent.
In November, the government lowered the forecast to 5.8 to 6.0 per cent, citing tighter monetary policy and heavy rains.
"During the quarter, most of the macroeconomic indicators remained relatively stable," the statistics office said in a statement.
The tourism sector, an important source of foreign exchange, has been undermined in recent years by al Shabaab attacks that have kept tourists away from
game parks and Indian Ocean beach resorts.
Prospects have improved since Britain, the source of more than half the nation's tourists, lifted a travel advisory covering most of the coast in June.
While the decline continued, it was at a slower pace compared to the year-ago period.
The accommodation and restaurants sector contracted by 2.3 per cent during the third quarter, compared to a 20.5 per cent drop during the same quarter of 2014. Tourist bed occupancy fell at a slower rate.
The statistics office said the sector was held back by "the lagged effects of insecurity and negative travel advisories by some key tourist source countries."
Construction activity grew at 14.1 per cent - faster than any other sector - compared to 8.8 per cent in the same period of 2014, while cement consumption increased by 10.7 per cent.
Agriculture expanded by 7.1 per cent during the quarter, compared to 6.8 per cent a year ago, due to improved weather conditions.
Inflation for the quarter came in at an average of 6.14 per cent, compared to 7.54 per cent during the same quarter in 2014, largely thanks to a decrease in transportation costs from the global fall in oil prices.