Kenya's economic growth slowed in Q1 of 2019

Kenya's economy was subdued in the first quarter of 2019, growing by 5.6 percent as compared to 6.5 percent in the first three months of 2018, the government statistics agency said Friday.

The growth, which was significantly slower, was mostly supported by growth in the service-sector industries such as wholesale and retail trade, transportation, accommodation and food services, financial and insurance activities, the Kenya National Bureau of Statistics (KNBS) said.

"The quarter was characterized by slowdown in agricultural activities following delay in the onset of long rains. The agriculture, forestry and fishing sector grew by 5.3 percent, compared to a growth of 7.5 percent in the first quarter of 2018," the KNBS said.

The slowdown in agricultural growth affected agro-processing and led to slower manufacturing activities.

The KNBS noted that the agricultural sector expanded by 5.3 percent during the period, compared to 7.5 percent in the same quarter of 2018.

"Nevertheless, the sector's performance was supported by a 6.6 percent growth in volume of tea produced, from 99,800 metric tons in the first quarter of 2018 to 106,300 metric tons during the period under review," it said.

In the horticulture sub-sector, the volume of cut flowers, fruits and vegetables grew by 3.7 percent, 22.2 percednt and 0.9 percent respectively.

"The sector's performance was hampered by contractions in production of coffee and sugarcane during the same period," the KNBS said.

The manufacturing sector is estimated to have grown by 3.2 percent in the first quarter of 2019, compared to a growth of 3.8 percent in the first three months of last year.

"The growth was curtailed in both manufacture of food and non-food activities. In the manufacture of foods products, growth was curtailed by manufacture of sugar, prepared preserved fish and processing of coffee, which recorded contractions in the review period," the bureau said.

In the manufacture of non-food products, growth was held back by manufacture of cement and of leather products that fell during the period.

"However, growth in the manufacture of food products sub-sector was supported by manufacture of bakery products, processing of tea, manufacture of vegetable oils, fats and beer," the KNBS noted. "In the non-food sub-sector, growth was mainly supported by assembly of motor vehicles."

The construction sector grew by 5.6 percent, compared to 6.6 percent in the corresponding quarter of 2018.

"The growth was supported by the continued construction of the second phase of the Standard Gauge Railway and other public infrastructural developments especially road construction," it said. "Consumption of cement, which is an indicator of construction activities, declined by 3.1 percent."

"The performance of transportation and storage sector recorded a slower growth of 6.7 percent in the first quarter of 2019, compared to 8.5 percent registered in the same period of 2018," the KNBS said.

The financial and insurance sector recorded a slower growth of 5 percent in the quarter under review, down from 5.2 percent in the corresponding quarter of 2018.

However, the KNBS said the macroeconomic factors were favorable to growth during the quarter under review.

"The average inflation in the period under review eased to 4.40 percent, from 4.49 percent in the first quarter of 2018. The Kenya shilling strengthened against all its major trading currencies during the quarter under review, compared to the same quarter of 2018," it said.

KNBS director-general Zachary Mwangi said during the period, Kenya's current account deficit narrowed to 78.8 billion shillings (772 million U.S. dollars), down from 1.15 billion dollars.

Xinhua