Kenya’s Economic Growth Slows, Missing Government Estimates
Kenya’s economic growth slowed in 2019, missing government estimates, as delayed rains hit agriculture.
East Africa’s largest economy expanded 5.4% last year, compared with the government’s most recent estimate of 5.7%, the Kenya National Bureau of Statistics said in a presentation Tuesday. This compares with growth of 6.3% in 2018.
Growth in gross domestic product quickened to 5.5% in the fourth quarter from a revised 5.2% in the previous three months. It was however slower than the 6.5% expansion in the same period a year earlier.
Agriculture, which makes up a third of gross domestic product, was hit by late rains and growth in the sector slowed to 3.6% in 2019 from 6% the previous year. Production of the corn staple fell 10% to 39.8 million bags in 2019. While rains have been good so far this year, agricultural exports such as flowers will probably take a big hit due to the coronavirus pandemic.
Most economic activities have slowed down due to a curfew and travel ban, National Treasury Secretary Ukur Yatani said at the presentation of the data. The government is reprioritizing spending to mitigate the impact of Covid-19 and will undertake studies to see the effect in various sectors.
The government now projects economic growth will slow to 2.5% this year, Yatani said. This could however go as low as 1.8%.
“Most of the projections we had made will not be realized due to Covid-19,” he said. “We are optimistic this will not be a permanent situation.”
These are some other key data points from the release:
- Domestic credit grew 7.5% from 6.4% in 2018.
- Exports dropped 2.9% to 596 billion shillings in 2019, while the import bill rose 2.4% to 1.8 trillion shillings.
- In the formal sector, 61,800 jobs were created and 767,000 in the informal sector.
- Kenya’s installed electricity capacity grew to 2,818 megawatts in 2019 from 2,711 megawatts.
©2020 Bloomberg L.P.