Economy bounces back to grow at 5.7 per cent

Traders hawk fresh farm produce to commuters in a vehicle at Keumbu market along Kisii - Nairobi highway. [Photo: Sammy Omingo/Standard]

The economy bounced back in the first three months of 2018 to grow at an impressive 5.7 per cent.

In 2017 the gross domestic product (GDP) grew at a five-year low of 4.9 per cent as the country grappled with drought, low credit and a prolonged electioneering period.

In the same period last year, the economy grew by 4.8 per cent.

 “The significant acceleration in growth was mainly attributable to improved weather conditions and a boost in business and consumer confidence after the conclusion of the elections in 2017,” said the Kenya National Bureau of Statistics in its quarterly GDP report.

Agriculture, which grew at 1.6 per cent last year, contributed to the rapid growth in the first quarter of this year. The sector expanded by 5.2 per cent compared to one per cent in a similar period in 2017.

A crippling drought for the better part of last year depressed the country’s harvest of major crops including maize, coffee, tea and sugarcane.  

Growth during the first three months of this year was also driven by improved activities in the wholesale and retail trade, manufacturing and real estate sectors. The manufacturing sector grew by 2.3 per cent in the quarter under review compared to 1.3 per cent in a similar quarter in 2017.

However, several sectors, including financial and insurance, transportation and storage, construction, electricity supply, and mining and quarrying, recorded marked slowdown.

Construction grew at 7.2 per cent compared to 8.2 per cent in the same period last year while financial and insurance grew by 2.6 per cent compared to 5.3 per cent in the first quarter of 2017.

A slower rise in the price of goods and services, or inflation, during the period under review played a major role in shoring up the growth.

Inflation averaged 4.49 per cent in the first quarter compared to 8.77 per cent in the same period last year.