The East African country attained this status after it replaced its old base year used for compiling the constant price estimates to a new and more recent base year, a process called rebasing.
Kenya's GDP increased to 55.2 billion US dollars in 2013 after rebasing from 44.1 billion US dollars, a 25.3 per cent jump surpassing the government’s prediction of 20.6 per cent. East Africa’s largest economy’s GDP per capita now stands at 1,246 US dollars from 999 US dollars.
(READ MORE: Kenya to update base year for GDP data)
During the ceremony to announce the results of the rebasing Kenya’s Cabinet secretary for devolution and planning, Anne Waiguru said that the rebasing of the economy gives a more accurate reflection of the structure and size of current economic activities in the country.
“We expect that rebased GDP will provide us with information necessary for evidence-based policy formulation, monitoring and evaluation. National planning requires comprehensive statistical information to ensure decisions are based on sound analysis,” Waiguru said.
The new figures released by the Kenya National Bureau of Statistics (KNBS) now places Kenya among the lower middle income nations in the world. This is the sixth time that the country has revised its National Account Statistics.
Agriculture, manufacturing and the real estate sector accounted for most of the change in the level of GDP. The agriculture sector’s contribution to the growth of the country was measured at 19.9 per cent, while manufacturing and the real estate sector each contributed 11.4 per cent and 5.9 per cent respectively.
However, according to Waiguru, the new GDP estimates do not imply that Kenya is now a richer country.
“GDP neither means that Kenyans will be better off nor does it imply the existing social economic challenges have ceased to exist. Rebasing Kenya's GDP gives hope that the policies put in place to realise Vision 2030, have kept us on course,” Waiguru explained.
The long overdue and necessary rebasing also saw Kenya’s growth rate of 2013 adjusted to 5.7 per cent from 4.7 per cent.
While Kenya is the first East African country to rebase its economy using the new model, its peers are expected to follow suit. Earlier this year Nigeria recalculated the way that it reports GDP, a move that made it surpass South Africa to become the biggest economy in the continent after the ongoing exercise.
(READ MORE: A closer look at Nigeria's GDP rebasing)