Kenya’s economy recorded a slight rebound in the third quarter of 2020, recording a lower contraction than that witnessed in the same period in 2019.
The Kenya National Bureau of Statistics (KNBS) attributed the improved performance to the partial easing of Covid-19 containment measures.
This facilitated gradual resumption of a number of economic activities thus slowly reviving the struggling economy.
“Real GDP is estimated to have contracted by 1.1 per cent in the quarter compared to a growth of 5.8 per cent in the corresponding quarter of 2019,” said KNBS in it’s latest quarterly gross domestic product report
During the quarter in review, the performance albeit constrained, was supported by a significant improvement in agricultural production and accelerated growths in mining and quarrying, construction, and public administration.
Real GDP is estimated to have contracted by 1.1 per cent in the quarter compared to a growth of 5.8 per cent in the corresponding quarter of 2019
KNBS
Strong growths in information and communication, financial and insurance, and real estate also supported growth from a deeper contraction.
The robust growth in agricultural activities was driven by favourable weather conditions witnessed in the first three quarters of the year, while the substantial growth in the construction sector was manifest in notable increase in consumption of cement.
The Q3 2020 performance however was curtailed by moderate contraction in manufacturing and distributive trade activities coupled with significant underperformance in accommodation and food service activities, and education activities.
During the period, the macroeconomic environment was premised on the need to cushion the economy from the adverse effects of Covid-19 pandemic.
Inflation eased from 5.03 per cent recorded in the third quarter of 2019 to 4.31 per cent in the quarter under review.
The Central Bank Rate(CBR) was maintained at 7.00 per cent during the entire quarter compared to 9.00 per cent recorded in the third quarter of 2019.
The Monetary Policy Committee (MPC) on Wednesday retained the base lending rate at seven per cent for the sixth consecutive time on accommodative policy stance and stable inflation.
Broad money supply rose from Sh3,473.4billion in September 2019 to Sh3,843.5billion in September 2020.
The initiative by Central Bank to lower CBR and increase money supply was aimed at stimulating the economy amidst the negative impacts of the pandemic.
The construction sector had the best performance in the quarter, recording a 16.2 per cent growth compared to 6.6 per cent growth in the corresponding quarter of 2019.
The growth was evidenced in the volume of cement consumed which increased by 23.5 per cent from 1,553.8 thousand metric tonnes in the third quarter of 2019 to 1,925.2 thousand metric tonnes in the review period.
The agriculture sector also remained an anchor to the economy recording a 6.3 per cent growth compared to 5.0 per cent growth in the third quarter of 2019.
The impressive performance was supported by increases in tea production, exports of fruit and sugarcane production.
Transportation and storage sector grew by 2.9 per cent in the review period compared to 7.6 per cent growth in the third quarter of 2019.
Financial and insurance sector grew by 5.3 per cent while the electricity and water supply sector expanded by 4.7 per cent.
The accommodation and food services sector continued to lag during the period contracting by 57.9 per cent compared to 9.9 per cent growth in the third quarter of 2019.
Activities related to the sector were really affected by the pandemic as it saw either complete closure of businesses or significantly scaled down operations.
“Despite easing of the containment measures in the review period, the sector was struggling to overcome the effects of the restrictive measures earlier implemented,” KNBS said
The manufacturing sector is estimated to have contracted by 3.2 per cent in the quarter compared to 3.9 per cent growth in the corresponding 3 quarter of 2019.
The contraction was shown in the various food sub-sectors such as; manufacture of meat and meat products, manufacture of liquid milk, manufacture of wheat flour, manufacture of beverages and manufacture of grain mill products.
