NAIROBI, Kenya, Oct 1 – The economy is estimated to have expanded by 4.3 percent during the second quarter of 2013, which was slightly slower than the growth of 4.4 percent experienced during the same quarter of 2012.
A report from Kenya National Bureau of Statistics (KNBS) says the growth was mainly supported by strong expansions of activities of electricity and water, financial intermediation, agriculture and forestry and manufacturing.
During the quarter under review, the agricultural and forestry sector is estimated to have expanded by 5.0 percent compared to a growth of 2.0 percent during a similar quarter in 2012.
The report says most of the agricultural crops recorded improved production with tea and horticulture remaining the major contributors to the sector’s growth.
“The growth in horticulture was mirrored in exports of vegetables and fruits that recorded respective growths of 14.3 per cent and 4.9 per cent during the quarter compared to a decline of 14.5 percent and 16.0 percent respective growths in the same quarter of 2012,” says the report.
Cut-flowers experienced a decline of 2.2 percent in production during the quarter under review.
The manufacturing sector recorded an overall growth of 4.3 percent in the quarter under review compared to 2.1 percent over a similar period in 2012, while electricity and water supply is estimated to have expanded by 12.0 percent compared to 7.9 percent in the second quarter of 2012.
Hotels and restaurants recorded a significant contraction while wholesale and retail trade’s growth slowed albeit marginally.
The hotels and restaurants sector’s growth is estimated to have contracted by 11.4 percent compared to a growth of 2.9 percent realized in the same quarter of 2012.
“The low bookings were mainly linked to uncertainties over the country’s general elections held in March this year,” the report stated.
The report indicates that the second quarter of 2013 was characterized by low inflation rate, which averaged at 4.37 percent compared to an average of 11.78 percent that prevailed during the second quarter of 2012.
The Kenyan Shilling strengthened against all its major trading currencies except the euro during the review period compared to the same period of 2012.
“The most notable gains being against the Japanese Yen and the South African Rand, 100 Japanese Yen exchanged at an average of Sh85.65 during the review quarter compared to Sh100.73 in the second quarter of 2012,” the report says.
According to the report, interest rates dropped significantly during the second quarter of 2013 compared to the same quarter of 2012 with Inter-bank rates recording the most drastic drop from 16.84 during the second quarter of 2012 to 7.41 in the quarter under review.
Activities of the capital markets were more vibrant during the quarter under review compared to the same quarter of 2012 with the Nairobi stock exchange registering an upsurge of 47.2 percent in the number of shares traded to 114,173 transactions from 77,543 transactions recorded in the second quarter of 2012.
Compared to the first quarter of 2013, the economy expanded by 0.7 percent during the second quarter as measured by seasonally adjusted Gross Domestic Product.