The Capital Markets Soundness report for the second quarter of 2019 shows that Kenya’s economy expanded by 5.6 percent in the first three months of 2019 compared to a 6.5 percent growth in a similar period in 2018. The slow growth was attributed to a deceleration in agricultural activities following a delay in the onset of long rains.
The manufacturing sector grew by 3.2 percent over the period, compared to a growth of 3.8 percent in 2018. Kenya National Bureau of Statistics (KNBS) reported a marginal rise in inflation to 5.7% in June from 5.49% in May attributed to higher fuel prices that increased transport costs.
The Kenya shilling has been relatively stable against the dollar averaging KSh102 during the quarter. CBK left its benchmark interest rate (CBR) unchanged at 9% with bank lending rate standing at 12.51%.
Kenya’s trade deficit was sh101.6 billion in April 2019. Exports grew by 0.5% fueled by higher sales of chemicals (6.4%), fish (54.9%), and petroleum (87%) and offset by declining sales of vegetables (-0.2%), tea (-12.2%), coffee (-13.4%), and cement (-83.5%). On the other hand, imports increased 0.2% to sh150.4 billion, boosted by food and live animals (9.3%), mineral fuels (18.2%), crude materials (38%), and beverages and tobacco (18.3%).
During the quarter, regulator Central Bank of Kenya (CBK) and CMA approved the takeover agreement between KCB group and the National Bank of Kenya (NBK). KCB offered to acquire NBK in a share swap where NBK investors will gain one share in KCB group for every ten shares they hold in NBK.
During the period, M-Akiba recorded a 75% subscription level raising sh187.5 million against the target of sh250 million running from May 27 to June 7 2019.
The Kenyan Government unveiled new generation banknotes as part of measures to curb fraud and money laundering. According to the third Medium Term Plan, Kenya’s population is projected to increase to 50.8 million by 2022 from 45.9 million in 2017.
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