Kenya’s Economy likely rebounded in the first quarter of 2022 from a deep contraction in the same period last year, helped by an improved services sector and despite the sixth wave of COVID-19 cases.
The Kenya National Bureau of Statistics says the economy expanded by 6.8% from a revised 2.7%.
KNBS attributed the faster growth to a recovery in transport and storage, accommodation and food provision, and other services sectors.
“The growth was also supported by accelerated growths in manufacturing, wholesale and retail activities and financial and insurance activities coupled with sustained growth in construction, real estate and information and communication activities,” KNBS director general Mcdonald Obudho said.
However, the agriculture sector was affected by inadequate rains.
Economists further add that the Kenyan Economy continues to reveal strong intrinsic vigour supported by sound domestic demand – a resilient consumer.
However, the Economy will shift to a slower growth gear reflecting headwinds from a weakening external sector, tightening local and external financial conditions, climate change-related shocks, rising commodity prices and the impact of the election-related uncertainty on public investments.
As a result, NCBA expects GDP to expand by 4.9 per cent in 2022, slower than their earlier projection of 5.2 per cent.
In addition, policymakers will struggle to regain control over the inflation narrative given the persistence of supply shocks.
“At the same time, their responses have to be carefully choreographed to avoid triggering yet another recession, but the tradeoffs will be difficult and sometimes painful, given the limited scope for fiscal support,” NCBA states.
