25 April 2018

Kenya: Economy Records Slowest Growth in Five Years

Kenya's economy grew by 4.9 per cent in 2017, recording the slowest margin in five years amid prolonged electoral process and adverse weather.

That pace of growth falls far below the 5.9 per cent recorded in 2016, data released today by the Kenya National Bureau of Statistics (KNBS) indicate.

The last time Kenya recorded growth below five per cent was in 2012, also an election year, when the economy expanded by 4.5 per cent.

"The slowdown in the performance of economy was partly attributable to uncertainty associated both a prolonged electioneering period coupled with adverse effects of weather," said Treasury and Planning Secretary Henry Rotich.

The KNBS data shows that agriculture, which accounted for 31.5 per cent of the 2017 GDP grew by only 1.6 per cent compared with 5.1 per cent in 2016.

All the segments except cut flowers shrunk during the period. Export earnings from cut flower grew by 16.1 per cent to hit Sh82.2 billion in 2017.

On the flip side, sugarcane deliveries to factories dropped by 33.3 per cent, from 7.2 million tonnes in 2016 to 4.8 million tonnes last year.

Inflation

Kenyans also had to contend with steady build-up in inflationary pressure on the back of rising oil and food prices through 2017. The KNBS data shows inflation rose to an average of 8 per cent last year, up from 6.3 per cent the previous year.

"We have lined up several interventions, which together with continuing political stability, good rains and macro-economic environment will lead to better economic performance in 201'8," said Mr Rotich.

"Inflation is expected to ease in 2018 supported by lower food prices due to good rains and improved agriculture," he added.

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