Kenya’s GDP growth slows to 5.3% in 2014

By bne IntelliNews April 29, 2015

Kenya’s gross domestic product (GDP) grew by 5.3% in 2014, slowing from a 5.7% expansion in 2013, the Kenya National Bureau of Statistics (KNBS) said in its 2015 Economic Survey Report. The slowdown was driven mainly by the economy’s two biggest sectors - agriculture and manufacturing, the data showed.

Agriculture, which contributed 27.3% to GDP, was hit by erratic rains that led to a slowdown in growth to 3.5% last year from 5.2% in 2013. Unfavourable weather conditions are expected to affect the sector also this year and its performance is seen remaining close to the 2014 level due to its over-reliance on rain fed water.

The manufacturing industry, which contributed 10% to GDP, saw growth decelerating to 3.4% from 5.6% in 2013. In addition, growth in the economy’s third biggest sector - trade and repair with a share of 8.2% - eased to 6.9% from 8.5%.

KNBS noted that the country’s economic performance last year was supported by increased government and private final consumption, the oil price drop, higher exports, and the stability of the local shilling currency against major currencies (despite slight depreciation against the US dollar).

Looking ahead, the bureau said that electricity prices might fall slightly this year due to increased share of geothermal electricity generation. At the same time, inflation, which quickened from an average of 5.7% in 2013 to 6.9% in 2014 is projected to ease in 2015, supported by lower prices of oil and electricity. Domestic demand is expected to remain strong with vibrant private sector investment and a focus of public expenditure on development projects, while the external environment is anticipated to improve.

  growth rate, y/y sector contribution to GDP growth
  2014 2013 2014 2013
Agriculture 3.5% 5.2% 14.5 20.8
Mining and quarrying 14.2% -8.9% n.a. n.a.
Manufacturing 3.4% 5.6% 7.1 10.9
Electricity 6.8% 9.8% n.a. n.a.
Construction 13.1% 5.8% 11.1 4.6
Wholesale and retail trade, repairs 6.9% 8.5% 9.8 11.0
Transport and storage 5.0% 1.2% n.a. n.a.
ICT 13.4% 12.3% 8.4 6.8
Finance and insurance 8.3% 8.1% 9.1 8.1
GDP growth 5.3% 5.7%    
Source: KNBS        

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