Kenyan economic growth slows as construction, industry weaken

by Reuters 0

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Kenya’s economic growth slowed to 5.5 percent year-on-year in the second quarter as manufacturing, construction and financial services weakened, the statistics office said on Wednesday.

Gross domestic product expanded 6 percent year-on-year in the same period of 2014, Kenya National Bureau of Statistics said.

On a quarterly basis, the economy grew a seasonally adjusted 1.7 percent in the second quarter of 2015, compared with 0.6 percent in the first quarter, the statistics office said.

Growth in construction slowed to 9.9 percent year-on-year from 16.6 percent. Manufacturing grew 4.5 percent compared with 8.3 percent in the second quarter of 2014.

Financial services grew by 6 percent, down from 7.9 percent, data showed. Tourism contracted, although by less than it had done in the same period of 2014.

Many tourists have shunned Kenya after a spate of attacks by Islamist militants. Western governments warned against travel to some areas, including parts of the usually popular coast.

But prospects have improved since Britain, the source of more than half the nation’s tourists, lifted a travel advisory covering most of the coast in June.

Agriculture performed better in the second quarter of 2015, growing by 5.4 percent year-on-year compared with 2.1 percent in the second quarter of 2014. 

“During the review period, the country experienced good rains that led to improved agricultural activities despite suppressed demand of key agricultural exports,” the statistics office said.

The Finance Ministry forecasts the economy will grow 6.5 to 7 percent in 2015.

The current account deficit widened by 61.8 per cent to 151.21 billion shillings, the statistics office said.

The growing gap has contributed to pressure this year on the shilling, which has lost more than 15 percent of its value against the dollar since the end of 2014.