Kenyan economy rebounds to grow by 5.3% in six months to June

The Kenyan economy has grown by an average 5.3 per cent in the first half of 2021 according to new data from the Kenya National Bureau of Statistics (KNBS).

KNBS has attributed the turnaround in Gross Domestic Product (GDP) to a broad-based recovery of most economic sectors following COVID-19 disruptions that hit home in the second quarter of 2020.

“The growth recorded was mainly as a result of easing of COVID-19 containment measures that facilitated gradual resumption of economic activity,” KNBS noted.

Growth in the first quarter was slower at 0.7 per cent in contrast to 4.4 per cent in the corresponding quarter last year before the onset of the pandemic while second-quarter growth stood at 10.1 per cent in contrast to a contraction of 4.7 per cent in the same period last year.

Between April and June this year, the sectors of manufacturing, education, transport & storage and ICT rebounded the strongest at 9.6, 67.6, 16.9 and 25.2 per cent respectively.

Nominal GDP by value in the first half of 2021 stood at Ksh.4.6112 trillion in contrast to Ksh.4.381 trillion in the same period in 2020.

The performance of the agriculture sector however slowed down in the period ending with a 0.9 per cent contraction in the second quarter compared to a 4.9 per cent growth rate last year.

The performance of the key sector was partly inhibited by a decline in tea production.

Growth in manufacturing through the second quarter was anchored on the production of non-food items such as locally assembled motor vehicles, and paper products.

Construction sector growth tapered in the second quarter having expanded at a slower pace of 6.5 from 8.2 per cent on the plateauing of activity in the sector.

Electricity supply grew by 5.2 per cent in the second quarter from 4.7 per cent on increased power generation while the transport and storage sector grew by 16.9 per cent in the same period to reverse a 16.9 per cent contraction last year.

Accommodation and food service activities grew by 9.1 per cent turning around from a 56.8 per cent contraction following the normalization of operations at bars, hotels, restaurants and entertainment joints with the easing of COVID-19 containment measures.

Meanwhile, financial and insurance activities grew by 9.9 per cent in the second quarter from 4.4 per cent last year.

The higher GDP print aligns with the broad easing of COVID-19 containment measures across key economic segments which have recently included the lifting of the night time curfew.

“This performance is encouraging and signals positive and progressive recovery from the effects of the COVID-19 pandemic on the Kenyan economy,” stated Treasury Cabinet Secretary Ukur Yatani.

The Kenyan economy is widely expected to recover in 2021 from last year’s 0.3 per cent rate of contraction with both the National Treasury and the Central Bank of Kenya (CBK) seeing growth at six and 6.1 per cent respectively.

The International Monetary Fund (IMF) and the World Bank meanwhile see GDP growth for Kenya at 5.6 and five per cent respectively this year.