Low agriculture, industry activity hampers economic performance (Kenya)

By Njirani Muchra | Business Daily, Kenya December 26, 2016

Kenya’s economic growth slowed down in the third quarter of 2016, dampened by poor output in agriculture, construction and manufacturing.

The economy expanded by 5.7 per cent between July and September compared to 6.0 per cent in a similar period of last year.

The third quarter performance is the lowest this year after the first quarter recorded 5.9 per cent growth and 6.2 per cent for the second quarter.

The Treasury has set an average growth target for the full year at 5.9 per cent.

“Generally, the economic growth was well spread although most of the sectors of the economy recorded slowed growths,” the Kenya National Bureau of Statistics said in a statement.

Agriculture, which is Kenya’s economic backbone, slowed to 3.9 per cent growth compared to 5.5 per cent in the same quarter of 2015, weakened by declines in tea and coffee production.

Manufacturing expanded at a slower pace of 1.9 per cent in the review period from 3.3 per cent while construction grew by 9.3 per cent, down from 15.6 per cent.

The statistics bureau said that manufacturing was weakened by a contraction in production of soft drinks, beer and stout alongside declines in assembly of motor vehicles and cement production.

Growth in the financials narrowed to 6.1 per cent from 10.3 per cent, coming in a period when interest rates were capped at four per cent above the policy rate.

On the flipside, the economy received a major boost from the recovery of tourism with accommodation and food service posting a 13.8 per cent growth, recovering from a 6.5 per cent contraction in the third quarter of 2015.

Visitor arrivals through Jomo Kenyatta and Moi international airports recorded a 25.8 per cent rise in the period under review compared to a decline of 14.5 per cent in third quarter of 2015.

“The upturn was mainly supported by the hosting of high profile meetings in the country during the review quarter as well as improved security situation,” the Kenya National Bureau of Statistics said.

Brisk activities

Transport grew by 10.3 per cent from 9.4 per cent, powered by brisk activities in freight and passenger road transport but air transport suffered marginal decline in growth.

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