- GDP expanded 5.1% in third quarter vs 5.6% in the second quarter
Kenya’s economy grew by 5.1 percent year-on-year in the third quarter of 2019 between July and September compared with 6.0 percent growth in the same quarter of 2018, the statistics office said on Tuesday.
The fall was attributed to a slowdown in most sectors, especially agriculture due to the drought experienced early in the year. “The deceleration in growth was mainly on account of suppressed growth in most of the sectors,” said Kenya Nationa Bureau of Statistics.
Growth in agriculture, forestry, and fisheries dropped to 3.2% compared with 4.2% in the previous quarter and down from 6.9% in the same period of 2018.
“The slowdown in agricultural growth somewhat affected agro-processing and consequently led to slowed manufacturing activities during the review period,” said KNBS.
Other sectors: Construction (6.6% from 7.0%), Wholesale and Retail (4.7% from 6.5%), Manufacturing (3.1% from 4.6%) and Transport (7.1% from 9.0%) recorded marked deceleration.
The sectors account for about 63.0% of GDP.
“Macroeconomic indicators showed mixed performances, but largely pointed to reduced economic activity compared to the third quarter of 2018.”
Genghis Capital Analysts in their Genghis Weekly Strategy. December 30th, 2019 they noted that “Looking back, we suspect that the third quarter was uplifted by increased private consumption. Purchasing Managers Index (PMI) which keeps pulse of private-sector optimism averaged 53.7 (51.63 in 2Q19 and 53.63 in 3Q18). That said, the arrears to the private sector coupled with low government spending clipped growth in the review quarter.”
“By all accounts, the 5.1% growth is a decent shot above the estimated growth for sub Saharan Africa and the world. However, this marks the slowest pace of expansion in 14 quarters and may be ground for more catalytic action by the central bank,” comments NCBA Analysts.