Kenya’s economic growth accelerated to 5.9 per cent in the third quarter of 2023, up from 4.3 per cent in the same period in 2022, according to the Kenya National Bureau of Statistics (KNBS).
This was the highest growth rate in six quarters, driven by a strong recovery in the agriculture sector, which expanded by 6.7 per cent after contracting by 1.3 per cent in Q3 2022.
The agriculture sector benefited from favourable weather conditions that prevailed in the first three quarters of 2023, leading to increased production and exports of fruits, vegetables, and tea.
financial sector
The financial sector also performed well, growing by 14.7 per cent, compared to 9.6 per cent in Q3 2022.
The sector was influenced by the Central Bank of Kenya’s monetary policy tightening, which raised the cost of credit and the average interest rates on loans and advances.
“The cost of credit issued by commercial banks went up during the third quarter, with average interest rates on loans and advances increasing to 13.98 per cent in September from 12.41 per cent in September 2022,” KNBS said.
accommodation and food service
Another sector that recorded a significant rebound was accommodation and food service, which grew by 26 per cent, up from 16.9 per cent in Q3 2022.
The sector was boosted by the influx of visitors, especially during the Africa Climate Summit Conference, which was hosted by Kenya in September.
manufacturing sector
The manufacturing sector registered modest growth of 2.6 per cent, slightly higher than 1.8 per cent in Q3 2022. The sector saw an improvement in agro-processing, especially in dairy and tea products.
However, some sectors experienced a slowdown in growth, such as electricity supply, transportation, storage, information, and communication.
The electricity supply sector was affected by reduced thermal and wind power generation, while the transportation and storage sector was impacted by lower consumption of light diesel.
The information and communication sector witnessed a decline in the use of domestic short messaging services.
