Kenya’s GDP grows 4.7pc in Q3

December 24, 2012

, NAIROBI, Kenya, Dec 24 – Kenya’s economy expanded by 4.7 percent in the third quarter of 2012 compared 4.0 percent growth recorded in the same quarter of 2011.

The expansion was more robust in comparison to the preceding quarters of 2012 primarily due to strong performances of the Agriculture and forestry, Fishing, Manufacturing, Transport and communication and a turnaround in the performance of the Electricity industry.

While releasing the results on Monday, the Kenya Bureau of Statistics noted that Construction, Hotels and restaurants, and Mining and quarrying experienced decelerated growths over the same period.

Seasonally adjusted Gross Domestic Product, which compares consecutive quarters, expanded by 2.2 percent in the third quarter of 2012, which was significantly better than the 0.5 percent recorded in the second quarter of 2012.

The period under review was characterized by low inflation rate, high interest rates and stable exchange rate of the shilling against major world and regional currencies.

Inflation averaged at 6.4 percent during the review period from a high 16.5 percent experienced during the third quarter of 2011. The ease in the inflationary pressures was mainly on account of lower food and fuel prices.

During the review period the exchange rate averaged at Sh84.60, Sh106.3 and Sh108.37 against the US Dollar, Euro and 100 Japanese Yen, respectively.

Regionally, the Kenya Shilling exchanged at Sh18.63 and Sh29.62 while the South African Rand averaged at Sh10.2.

During the third quarter of 2011, the exchanges rates were Sh94.6, Sh133.5 and Sh122.9 against the US Dollar, Euro and 100 Japanese Yen, respectively.

High interest rates that prevailed during the quarter under review were on account of the Central Bank’s sustenance of a tight monetary policy stance. Expansion in broad money supply slowed to 13.6 percent during the review period compared to a growth of 18.0 percent during a similar period of 2011.

Weighted interest rates on commercial banks loans and advances rose significantly from an average of 14.41 percent during the third quarter of 2011 to 20.0 percent in corresponding period of 2012.

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