Kenya: Growth slows to two-year low in Q3
December 31, 2019
Year-on-year growth slowed to 5.1% in the third quarter of 2019, down from the second quarter’s 5.6% and marking the lowest reading since Q3 2017, according to Kenya’s Statistical Institute (KNBS).
The third-quarter moderation largely reflected a broad-based slowdown in activity across all sectors. Output in the all-important agricultural sector eased to 3.2% in the third quarter (Q2: +4.2% year-on-year), hampered by a marked decline in the production of key crops such as tea and sugar. In addition, activity growth in the manufacturing sector lost pace, ebbing to 3.1% in Q3 from the second quarter’s 4.2%, largely owing to a drop in the manufacture of sugar and the processing and preservation of fish. Meanwhile, activity in the wholesale and retail trade sector also waned in the third quarter, as growth slowed to 4.7% from the previous quarter’s 6.0%.
Economic activity is seen picking up this year amid sturdier domestic demand. Buoyant household consumption is expected to underpin the expansion, while solid public expenditure should provide further support to growth. However, adverse weather conditions and a wide fiscal deficit pose downside risks to the outlook.
Author: Hanna Andersson, Economist