Economy slows down as year closes

By Jackson Okoth

As the year draws to a close, fears are growing that the economy could be entering into a recession.

Figures from the National Bureau of Statistics (KNBS) indicate that economic growth slowed to 2.1 per cent in the third quarter from 6.3 per cent in the same period last year.

The statistical bulletin cites negative impacts of post-election violence, global economic slowdown and financial crunch and unprecedented fuel and food prices for the slow down.

This is the lowest growth for the quarter in the last five years.

Wholesale and retail trade contracted by 0.7 per cent, the same as in the manufacturing sector, while agriculture made a 4.7 per cent decline.

The decline is attributed to low production of food crops owing to unfavourable weather conditions, disruption of agricultural activities by post-election skirmishes and high cost of agricultural inputs.

"Production of most agricultural outputs in the year is expected to decline with maize likely to suffer the highest reduction," said the bureau.

For the third consecutive quarter this year, hotels and restaurants recorded a massive decline of 34.7 per cent.

"This decline continues to be attributed to reduction of international arrivals", said KNBS.

Interestingly, the construction sector maintained robust growth from 26.4 per cent in the second quarter to 33.3 per cent by September this year.

However, falling international prices of crude could cushion the blow. W