The Kenyan economy has capped the end of 2015 on a high note with latest government data showing the country’s economy expanded by 5.8 per cent during the third quarter of 2015 compared to 5.2 per cent recorded during a similar period in 2014.
Provisional estimates of Gross Domestic Product released by the Kenya National Bureau of Statistics, (KNBS) on Tuesday showed that growth was mainly supported by agriculture, construction, financial and insurance sectors as well as wholesale, retail trade, transport and storage.
The World Bank, the International Monetary Fund and the National Treasury had late this year all trimmed Kenya’s 2015 growth forecast due to the volatile shilling, weak revenues and sluggish exports.
However according to the KNBS statistics, the construction industry recorded the fastest growth of 14.1 per cent followed by mining and quarrying, electricity supply and financial and insurance with growths of 12.5 per cent, 11.0 per cent and 10.1 per cent, respectively. These shored up the economy.
Accommodation and food services (hotels and restaurants), however, continued on the decline that started last year.
The data shows that during the quarter, most of the macro-economic indicators remained relatively stable.
Inflation eased to an average of 6.14 per cent from 7.54 per cent recorded in the corresponding quarter of 2014 mainly due a fall in transportation costs in line with the global decline of oil prices.
“Globally, Murban ADNOC crude oil prices halved to average at $51.05 per barrel during the quarter under review compared to $103.9 in the same quarter of 2014.
Domestically, the retail prices for light diesel declined by 20.0 per cent over the same period,” said KNBS.
The statistics showed that in the money market, the Kenyan shilling strengthened against the Euro, Yen, South African Rand, Ugandan shilling and the Tanzanian shilling but weakened against the US Dollar and the Sterling Pound during the third quarter of 2015 compared to a similar period in 2014.
At the same time, despite an increase of the Central Bank Rate (CBR), the statistics showed that the weighted interest rates on commercial banks loans and advances declined by 0.61 percentage points to average at 15.79 per cent during the quarter under review compared to 16.40 per cent in the same quarter of 2014.
“The CBR was adjusted from 8.50 per cent, that prevailed in the first half of 2015, to 10.0 per cent in June and later to 11.5 per cent in July 2015,” KNBS said.
However, the volume of stocks traded at the Nairobi Securities Exchange (NSE) declined significantly to an average of 4,251 shares compared to 5,100 shares traded during a similar quarter of 2014.
During the review period, the value of total exports increased by 23.2 per cent while the import bill declined by 9.7 per cent, resulting to narrowing of the current account deficit by Sh86.5 billion compared to the same quarter in 2014.
Ahead of the release of the statistics, National Treasury Cabinet Secretary Henry Rotich exuded optimism of a better year ahead for the economy insisting it will exhibit resilience in the face of global shocks.
“Looking ahead in 2016 and near-term, our economy will remain resilient and we should see our economy growing by at least over 6 per cent on the back of favourable weather, recovery in tourism, and continued strong investment as the business environment improves.
Completion or near-completion of several infrastructure projects initiated by the Jubilee administration including the standard gauge railway should accelerate growth,” he told the Nation.