Kenya’s GDP growth slows to 4.6 per cent in second quarter

Kenya's economy expanded by 4.6 per cent in the three months to June this year, a slowdown from 5.0 per cent the previous quarter.

In comparison to the same quarter last year, this represents a further decline from the growth rate of 5.6 per cent.

The latest quarterly report by the Kenya National Bureau of Statistics (KNBS) did not give reasons for the constrained GDP growth.

"The prospect was largely supported by agriculture, forestry and fishing which grew by (4.8 per cent), real estate (6.0 per cent), financial and insurance activities (5.1 per cent), and wholesale and retail (4.4 per cent)," the report reads.

"Additionally, the economy benefited from robust performances in other sectors of the economy, such as accommodation and food services (26.6 per cent), information and communication (7.2 per cent), and professional, administrative and support services (6.8 per cent)."

However, it adds that the growth was somewhat hampered by contractions in the mining, quarrying and construction sectors during the quarter under review. Mining and quarrying contracted by 2.7 per cent.

Similarly, the construction sector also contracted by 2.9 per cent, compared to a growth of 2.7 per cent in the second quarter of 2023.

The macroeconomic indicators generally showed mixed performance in the period under review.

The inflation rate, for instance, slowed to an average of 4.87 per cent in the second quarter of 2024 from 7.94 per cent in the corresponding quarter of 2023, mainly due to lower prices of transportation and food and non-alcoholic beverages.

On the other front, the appreciation of the Kenyan shilling that started in the first quarter of 2024 continued in the period under review.

The Kenyan shilling appreciated against all major currencies during the second quarter compared to the corresponding quarter of 2023.

On average, the shilling gained ground against the Euro, US Dollar and Pound Sterling by 5.6, 4.6 and 3.7 per cent, respectively.

Similarly, the local currency appreciated against the South African rand, Tanzania shilling, and Uganda shilling.