NAIROBI, Oct 14 (NNN-KBC) — Kenya’s economy contracted in the second quarter to 5.2pc compared to 11pc growth in the corresponding quarter of 2021, latest data by Kenya National Bureau of Statistics (KNBS) reported.
The contraction was due to a dip in growth in the agriculture, forestry and fishing activities mainly on account of unfavorable weather conditions.
KNBS quarterly gross domestic product report further denotes growth in the financial, retail, mining and accommodation sector during the period in review.
Unfavorable weather conditions recorded during the last quarter of 2021 and the first half of 2022 characterized by prolonged dry spells dampened activities in the agriculture, forestry and fishing activities’ resulting in a 2.1pc contraction in the second quarter of 2022 compared to a contraction of 0.5pc in the corresponding quarter of 2021.
This led to a decline in exports where the volume of fruit exported dropped by 34.2pc while that of vegetable decreased by 33pc.
In the manufacture of food products, growth was supported by processing and preserving of meat and fish, and manufacture of bakery products, while manufacture of non-food products, growth was buoyed by assembly of motor vehicles and production of cement.
However, growth of the sector was constrained by manufacture of dairy products and manufacture of edible oils.
During the period, cement consumption increased by 7.8pc to 2.3 million metric tonnes in the second quarter of 2022 from 2.1 million metric tonnes in the same period of 2021 supported by ongoing infrastructural projects.
Electricity and Water Supply sector expanded by 5.0pc with geothermal sources recording the biggest contribution to the production mix at 46.6pc. Hydro came in second at 24.9pc.
The financial and insurance sector grew by 11.6pc in the second quarter of 2022 compared to 17.3pc in the same quarter of 2021.
The cost of borrowing from commercial banks increased with interest rates rising to 12.27pc from a rate of 12.02pc in June 2021, while the savings rate decreased from 2.55pc in June 2021 to 2.5pc in June 2022.
At the same time cost of inter bank borrowing increased to 5.06pc by end of June 2022 compared to 4.63pc in June 2021.
Overall, the country’s current account deficit widened by 9.7pc to Ksh 174.4 billion in the second quarter of 2022 from Ksh 158.9 billion on account of increase in merchandise trade deficit mainly occasioned by a 31.7pc growth in imports to Ksh 594.3 billion compared to a 27.4pc increase in exports to Ksh 228.7 billion. — NNN-KBC
