Kenya’s economic growth rate fell to a 2-year low, expanding 4.6% in the second quarter of 2024, down from 5.6% in the same period in 2023.
- The Kenya National Bureau of Statistics (KNBS) body attributed the expansion, albeit slower, – as shown by the Gross Domestic Product (GDP) – to robust growth from agriculture, manufacturing, real estate, forestry and fishing, wholesale and retail, and financial and insurance activities.
- The growth, which compares with 5% in the first quarter of 2024, was however tempered by contractions in the mining, quarrying and construction sectors.
- Mining and Quarrying contracted by 2.7% during the quarter, up from a larger 8.3% expansion in a similar quarter in 2023. Similarly, the construction sector contracted by 2.9%, reversing the 2.7% growth in the second quarter of 2023.
The manufacturing sector’s real GDP growth accelerated to 3.2% in the three months to June, compared to the 1.5% growth in the same period in 2023. The growth was supported by significant increases in production of food, including soft drinks, sugar and milk, however slowed down by a 0.6% decline in Tea production.
Agriculture activities grew by 4.8% in Q2 compared to 7.8% in the same period in 2023 buoyed by increased production of sugarcane, milk and fruit exports.
Electricity sales increased during the period attributed to an increase in electricity imports. The mild growth of the electricity subsector was supported by an increase in the generation of electricity from hydro, and a reduction in the generation of electricity from thermal.
Motor vehicles assembly contracted by 17.3% in the period with both cement production and consumption declining by 8.1% and 7.8% respectively, justifying the slowdown in construction.
Domestic passenger traffic in both air and railway saw declines on the back of depressed demand in the off-peak season nature of the review period. However, revenue from passenger railway transport rose by 36.8% to KSh971.6 million during the review period. The volume of cargo transported through SGR expanded by 8.7% in the three months to June 2024.
The several high profile events held in Nairobi between April and June spurred a 6.4% increase in visitor arrivals contributing to the growth of the accommodation and food service sector during the review period.
“These included the inaugural Connected Africa Summit 2024, which took place in April; Swift Connect Africa 2024, held in May; and the Global Peace Leadership Conference (GPLC) Africa 2024, held in June,” KNBS noted in the 2nd Quarter ECONOMIC report on Wednesday.
Broad money supply grew by 7% with the total domestic credit growing by 3.3% to KSh6.8 trillion in June 2024 on account of resilient credit to private sector. Financial and insurance activities grew by 5.1% in Q2 2024 compared to 13.2% in Q2 2023 where the central bank rates were 13.00% and 10.50% respectively.
The second quarter of 2024 was marked by deadly protests against tax hikes which corrupted consumption and output levels. On the upside, the moderating inflation towards the target range coupled with the stable shilling during the period counterbalanced, buoying recovery in the subsectors.
