In the first quarter of 2014 the country’s Gross Domestic Product (GDP) grew at 4.4 percent.
According to the latest data from the Kenya National Bureau of Statistics, the growth was mainly supported by robust growth in the construction sector at 18.9 percent, Manufacturing at 9.1 percent financial and insurance at 8.3 percent, Information Communication and Technology at 6.4 percent and wholesale at retail trade at 6.8 percent.
Merchandise trade deficit widened to Sh262 billion from Sh204 billion recorded in 2013, with the widening of trade balance attributed to increase in import expenditure.
Increase in imports of fuel and lubricants saw the Import bill increase by 22.5 percent to Sh403.4 billion in the second quarter of 2014 compared to Sh329.4 billion recorded same period last year.
Total exports value increased by 13 percent to Sh141 billion from Sh124.8 billion in 2013, while current account deficit worsened by 49.5 percent to Sh142 billion as a result of an increase in international services by eight percent from Sh50 billion in 2013 to Sh54 billion.
“Net inflows in capital and financial account increased by 25 percent to a surplus of Sh93.9 billion from Sh74.7 billion recorded in 2013. The increase was largely in financial account attributed to long term capital inflows from the sale of the Euro bond in June 2014,” the report stated.
This comes as the country rebased the economy to raise its GDP by 25 percent to Sh4.76 trillion from the previous Sh3.8 trillion.
The rebasing lifts average per capita income in Kenya to USD 1,246 (Sh111.26), effectively meaning that the country moves to lower middle income status.
With the rebasing of GDP, Kenya’s growth rate for 2013 has also been revised higher, to 5.7 percent growth in 2013 from an estimated 4.7 percent.
According to economic experts the move will see Kenya’s credit metrics appear more positive as public debt ratio will be measured as a percentage of larger GDP making it decline.