Kenya's economy slows down to 4%

Kenya’s economic growth slowed to four per cent in the third quarter of 2024, despite easing inflationary pressures and a stronger shilling.

The latest data from the Kenya National Bureau of Statistics (KNBS) shows the economy contracted by 2% compared to the 6% growth reported in the same period in 2023.

KNBS Director of Population and Social Statistics Abdulkadir Awes attributed the slowdown to a decline in growth across most sectors of the economy.

KNBS data shows that third-quarter growth was constrained by contractions in construction, and mining and quarrying sectors.

Construction activity fell by 2%, while mining and quarrying recorded an 11.1% contraction during the period under review.

Growth in the agriculture, transport, and real estate sectors was insufficient to sustain overall positive growth.

Forestry and fishing grew by 4.2%, transportation and storage by 5.2%, financial and insurance activities by 4.7%, and real estate activities by 5.5%.

During the quarter, the Kenyan Shilling appreciated against major currencies compared to Q3 2023, gaining 10.1% against the U.S dollar, 9.3% against the Euro, and 7.7% against the Pound Sterling.

Regionally, the Kenyan Shilling gained 21.2% against the Tanzanian Shilling and 11.7% against the Ugandan Shilling. However, it depreciated by 12.7% and 6.7% against the Japanese Yen and South African Rand, respectively.

The economy also faced challenges in the capital markets. The number of shares traded at the Nairobi Securities Exchange (NSE) dropped from 424 million in September 2023 to 334 million in September 2024.

Consequently, the total value of shares traded fell from 5.2 billion shillings to 5.0 billion shillings, signaling reduced market activity.

However, the NSE 20 share index rose from 1,508 points in September 2023 to 1,776 points in September 2024, reflecting improved equity market performance despite the decline in trading volumes.