GDP growth remains largely stable in Q1

In the first quarter of 2024, the economy posted a robust expansion of 5.0% year on year, largely stable from 5.1% in the fourth quarter of 2023. That said, the reading marked the softest increase since Q4 2022.

On the production front, the slight annual GDP moderation was broad-based. Growth in the agricultural sector—which accounted for nearly 22% of GDP in 2023—decelerated to 6.1% year on year (Q4 2023: +6.2% yoy). That said, the sector remained the driving force of the economy in Q1 and benefited from favorable weather and government intervention aimed at increasing output. Moreover, the manufacturing sector also lost steam, growing 1.4% in Q1 (Q4 2023: +2.0% yoy), and construction sector output increased only 0.1%, far below the prior quarter’s 2.2% expansion. More positively, electricity, gas and water supply growth accelerated to 2.4% (Q4 2023: +1.3% yoy). In the tertiary sector, the transport sector rose at a slower clip of 3.8% year on year in Q1 (Q4 2023: +8.5% yoy), but growth was buoyed by the well-performing agricultural sector. Lastly, growth of the retail and wholesale trade sector hit an over two-year high of 4.9% in the first quarter (Q4 2023: +2.8% yoy), boosted by the still-ongoing post-pandemic recovery.

Our panelists expect the economy to have gained steam in the second quarter. That said, risks to the projection are skewed to the downside amid recent flooding and the mass protests that broke out at the tail end of the quarter after the government announced a plan to hike taxes.

Shani Smit-Lengton, analyst at Oxford Economics, commented: “Although Kenya is reeling from the recent floods that have caused loss of life and significant damage to agricultural land and infrastructure, the East African nation continues to receive substantial external support, which will help keep the economy afloat in the short- to medium term.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Kenyan GDP projections for the next ten years from a panel of 18 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Kenyan GDP.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Kenyan GDP projections.

Want to get access to the full dataset of Kenyan GDP forecasts? Send an email to info@focus-economics.com.