By James Anyanzwa
and John Oyuke
Kenya’s economic growth declined in the second quarter (April to June) with most sectors registering subdued activities.
But even as the economy continues to paint a grim outlook, the cost of living dropped with the overall month-on-month inflation falling to 5.32 per cent in September from 6.09 per cent in August.
According to data from the Kenya National Bureau of Statistics (KNBS), the economy expanded by 3.3 per cent compared to a growth of 3.5 per cent in a similar period last year.
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Agriculture and forestry slowed substantially growing by 1.6 per cent compared to a growth of 4.2 per cent in the second quarter of last year.
The decline in performance of agriculture was mainly an outcome of a decrease in exports of cut flowers, fruits, vegetables and tea.
Other sectors whose growth decelerated compared to the respective quarter of last year include construction, hotels and restaurants, mining and quarrying, real estate, business services, and financial intermediation. But a few sectors recorded improved performance with significant expansions being witnessed in the electricity and water and fishing sectors, which grew by 13 per cent and 9.6 per cent.
Financial intermediation and transport and communications also performed well during the quarter under review.
Inflation slowed for the 10th consecutive month in September, allowing Central Bank to further lower interest rates.
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The Central Bank of Kenya’s Monetary Policy Committee is due to hold its next meeting in November. The bank has cut the rate twice since July, by a total of five percentage points, to 13 per cent. But the consumer price index increased by 0.3 per cent during the month compared to August.
During the period under review, food and non-alcoholic drinks’ index increased by 0.29 per cent, according to the KNBS data.
This came about as a net effect of both falls and rises in the prices of a number of food products.
“The prices of sukuma wiki, tomatoes, onions and carrots for instance declined by 6.8, 3.1,3.2, and 6.2 per cent, between August and September.”
On the other hand, significant rises were observed in respect of prices of other food products like sugar, potatoes, oranges and beef among others.
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The net effect was a slight increase in the food index. Housing, water, electricity, gas and other fuels’ index went up by 0.35 per cent between August and September.
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economic growth kenya KNBS