Kenya: Economic growth continues to lose momentum in Q3 2022
Economic growth lost further steam in the third quarter of 2022, with GDP growth waning to 4.7% year on year. The result, which came in below the 5.2% increase recorded in the prior quarter, was the softest since Q1 2021. Conversely, underlying momentum strengthened at a quicker pace; the economy expanded 0.9% in seasonally adjusted quarter-on-quarter terms, above the 0.6% expansion tallied in the previous quarter.
The moderation in annual growth was partially due to an unfavorable base effect, as the economy grew 9.3% in the same quarter a year ago. Construction sector growth moderated during the quarter (Q3: +4.3% yoy; Q2: +5.8% yoy), as did the transport and storage sector (Q3: +4.8% yoy; Q2: +7.1% yoy). Additionally, manufacturing activity growth softened, waning to 2.4% in Q3, down from the prior quarter’s 3.6% increase. Lastly, the mining and quarrying sector posted a 2.2% contraction in July–September, which was a sharp contrast to the 22.6% expansion clocked in the previous three months. More positively, the all-important agricultural sector contracted at a softer 0.6% annually in Q3 (Q2: -1.4% yoy), largely on improved fruit, coffee and cane production. Furthermore, growth in the accommodation and restaurant sector accelerated in the third quarter to 22.9% (Q2: +22.0% yoy).