Credit squeeze sees Q1 growth slow to 4.7pc

Kenyan economic growth slowed to 4.7 percent in the first quarter compared with the same three months last year, held back by drought and slowing credit growth, the statistics office said on Friday.

Growth has been slowing in recent quarters, from 6.2 percent year on year in the second quarter of 2016 to 5.7 percent in the third quarter and now falling to less than 5 percent.

Most experts expect that trend to continue this year due to a regional drought that has left 2.7 million people in need of food aid.

The drought has also hit agriculture, including exports of tea and coffee, which accounts for more than a quarter of annual output in the region’s largest economy.

“The quarter’s growth was negatively impacted on by drought that emanated from failure of the 2016 short rains and delay in the onset of the 2017 long rains,” the Kenya National Bureau of Statistics said in a statement on its website.

Growth has also been hurt by a slowdown in private sector credit growth, which fell to 3.3 percent in March compared with a blistering 17 percent at the end of 2015.

“A slowdown in credit uptake also slowed economic growth during the period under review,” the statistics office said.

The government is forecasting growth of 5.9 percent this year, compared with 5.8 percent in 2016. The World Bank said in April the economy was likely to grow by 5.5 percent in 2017.