Kenya’s GDP growth quickened to 5.5% y/y in the second quarter from 4.9% in the preceding three months, reflecting improved performance in the economy’s two biggest sectors – agriculture and manufacturing - preliminary data from the Kenya National Bureau of Statistics (KNBS) showed. On a seasonally-adjusted quarterly comparison basis, the economy expanded 1.7% in Q2, speeding from a 0.6% growth in Q1.
The gross domestic product of East Africa’s biggest economy equalled KES1.48trn ($14.1bn) at current prices and KES1.022trn at constant 2009 prices in Q2.
The economy’s single largest sector, agriculture, which accounted for nearly a quarter of the country’s total economic output (at constant prices), recorded a 5.4% y/y expansion in Q2, speeding from a 4.4% growth in Q1, underpinned by increased activities in the growing of maize, vegetables, and fruits thanks to favourable climatic conditions. Higher output from these core crops more than offset farm losses of beans and potatoes, which were adversely affected by heavy rains in some regions, KNBS said.
However, Kenya’s traditional exports of tea, coffee and flowers, which fetch a major part of the hard currency to the country, underperformed. Volume of cut flower exports fell 4.2% y/y to 29,357 metric tonnes in Q2 and that of coffee exports dropped 10.6% y/y to 12,551 metric tonnes. Tea production shrank 17.2% y/y to 93,646 metric tonnes, which was countered by a 43% y/y surge in average prices.
The second biggest sector, manufacturing with an 11% share, recorded a 4.5% y/y growth in Q2, up from 3.5% in Q1, reflecting reduced cost of inputs such as electricity and higher demand for cement, among others.
At the same time, contraction in Kenya’s struggling tourism sector, another large hard currency earner, softened to 0.8% from 7.5%.
The International Monetary Fund (IMF) has projected Kenya’s GDP growth to accelerate from 5.3% in 2014 to 6.9% in 2015, while the World Bank sees it at 6.0%. Growth is underpinned by government investments in railway infrastructure and energy generating capacity.
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