Kenya’s Economic Growth Slows, Missing Government Estimates
Kenya’s 2019 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.