The Kenyan economy experienced a significant slowdown in the third quarter of 2024, with GDP growth decelerating to 4%, marking the slowest pace in four years.
This figure fell short of the Central Bank of Kenya’s forecast of 5.2%, raising concerns among market observers.
The slowdown was primarily driven by contractions in key sectors such as construction (2.0%) and mining and quarrying (11.1%).
Global economic headwinds and geopolitical uncertainty may also have contributed to the slower-than-expected growth.
Growth Drivers
Despite the overall slowdown, some sectors exhibited positive growth, including agriculture, forestry, and fishing (4.2%); transportation and storage (5.2%); financial and insurance activities (4.7%); real estate (5.5%); and wholesale and retail trade (4.8%).
The slower-than-expected growth is likely to dampen investor sentiment and could impact the economic outlook for the remainder of the year. Key sectors such as construction and mining experienced contractions, contributing to the overall slowdown.
This news comes amidst a backdrop of subdued business confidence, with the latest Stanbic Bank Kenya Purchasing Managers’ Index (PMI) revealing that only 5% of surveyed firms anticipate increased output in the next 12 months.
While the PMI remained above the 50-point threshold, indicating overall expansion, the subdued outlook highlights concerns about the sustainability of economic growth.
