Kenya’s Q1 growth steady at 4.9 per cent despite service sector slowdown

Positive growth in key production sectors such as agriculture, manufacturing and construction did not do enough to accelerate Kenya’s overall economic growth in the first three months of the year.

The economy grew at a pace of 4.9 per cent during the period, unchanged from the same period last year.

According to the latest quarterly GDP report by the Kenya National Bureau of Statistics (KNBS), the plateau in growth is largely due to a slowdown in several high-impact service sectors.

These are: Transport and storage, information and communication, accommodation and food services, as well as financial and insurance activities.

All recorded modest expansions compared to the corresponding quarter of the previous year, weighing down the overall pace of growth.

The transportation and storage sector’s GDP expanded by 3.8 per cent compared to 4.1 per cent growth in the corresponding quarter of 2024.

On the other hand, accommodation and food service activities decelerated to 4.1 per cent compared to a growth of 38.1 per cent in the previous year.

The Information and Communication sector grew by 5.8 per cent, down from 9.2 per cent.

Nevertheless, the financial and Insurance sector recorded a growth of 5.1 per cent, down from 9.6 per cent growth in the corresponding period last year.

However, the statistics body maintains a brave face, saying all sectors of the economy recorded positive growth during the quarter under review, albeit in varying magnitudes.

Contrary to the decline in growth in the aforementioned service sectors, KNBS highlights positive growth performances in key production sectors during the quarter.

“Agriculture, forestry and fishing activities grew by 6.0 per cent compared to 5.6 per cent growth in the first quarter of 2024,” the report reads.

“This performance was driven by favourable weather conditions experienced in most parts of the country involved in crop and animal production.”

Additionally, the manufacturing sector grew by 2.1 per cent compared to 1.9 per cent growth in the corresponding quarter of 2024.

The construction sector expanded by 3.0 per cent compared to 0.4 per cent recorded in the same quarter last year.

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The growth in the sector is reflected in the increased uptake of inputs into the industry, such as cement, iron and steel, during the review period.

Notably, cement consumption increased from 1.9 million metric tonnes in the first quarter of 2024 to 2.3 million metric tonnes in the first quarter of 2025, marking a 20.3 per cent growth.

Electricity and water supply sectors recorded a combined growth of 3.6 per cent compared to a growth of 2.8 per cent in the corresponding quarter of 2024.

The growth is largely attributed to an increase in total electricity generation, which increased by 5.0 per cent to stand at 3,208.8 million kilowatt hours (kWh), partly driven by growth in wind and solar generation.

“Electricity generated from solar and wind increased by 12.5 per cent and 6.3 per cent to 133.0 million kWh and 521.9 million kWh, respectively.”