Kenya’s economy is unlikely to hit the 5.6 per cent economic growth rate in 2013 projected by the government earlier this year. According to the Kenya National Bureau of Statistics (KNBS) the economy posted a 4.4 per cent growth in the third quarter of this year compared to growth rates seen in the previous two quarters.
In the quarter to March, the economy grew 5.2 per cent and 4.3 per cent in the quarter to June, which adds up to an average growth rate of 4.6 per cent in the three quarters to September. The National Treasury has previously said it expects the economy to grow by 5.6 per cent in 2013 and well over 6 per cent in 2014, which would be a significant leap from the 4.6 per cent growth in 2012.
Cabinet Secretary Henry Rotich justified the growth forecast citing first quarter growth as an indicator of the country’s fortune going forward.
Other financial institutions, however, maintained that the best that the Kenyan economy could do was a growth rate in the range of 5 per cent.The African Development Bank (AfDB) earlier this year projected the Kenyan economy to grow 4.5 per cent in 2013 and reach 5.2 per cent in 2014. The World Bank expects the country to grow 5 per cent and modestly rise to 5.1 per cent next year, on the back of low government spending and high interest rates. KNBS figures released Monday also showed a slight dip in the third quarter growth rate this year at 4.4 per cent compared to a similar quarter last year, which grew 4.5 per cent.
It attributed this to slowed growth in the agriculture – which accounts for over 24 per cent of the GDP – and the tourism industry. Agriculture and forestry “There was a slowdown in the growth of the agriculture and forestry sector, which impacted negatively on the economic performance. Activities of hotels and restaurants rebounded though the growth remained relatively suppressed,” said the Bureau. “The agriculture and forestry sector expanded by 3.4 per cent compared to 5.8 per cent in a similar quarter of 2012,” it added. Slowed growth in agriculture was due to a 15.9 per cent decline in coffee production over the quarter as well as a 32 per cent decline in exports of fruits and a 4.4 per cent decline in cut flowers.
