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Kenya's economy experienced a slowdown in the third quarter of 2024, recording a 4.0% growth compared to a stronger 6.0% in the same quarter of 2023, according to the Kenya National Bureau of Statistics (KNBS).
The decline is attributed to poor performance in key sectors like construction and mining, partially offset by improvements in agriculture, transportation, and accommodation services.
Mixed Sectoral Performance
Agriculture, Forestry, and Fishing
The sector grew by 4.2%, slightly lower than the 5.1% growth in Q3 2023. Favourable weather boosted sugarcane production (up 189%), but tea production fell by 12.2%.
Manufacturing
Growth in this sector slowed to 2.3% from 2.8% in 2023. Sugar production tripled, but declines in cement production (12.1%) and galvanised sheets (4.2%) constrained growth.
Construction
The sector contracted by 2.0%, reflecting a 10% drop in cement consumption and a sharp 40.9% fall in bitumen imports.
Accommodation and Food Services
This sector posted impressive growth of 13.7%, driven by increased visitor arrivals.
Macroeconomic Indicators
Inflation
Average inflation eased significantly to 4.08% from 6.93% in Q3 2023 due to lower food and beverage prices.
Currency Performance
The Kenyan Shilling appreciated against most major currencies, notably gaining 10.1% against the US Dollar and 21.2% against the Tanzanian Shilling. However, it depreciated by 12.7% against the Japanese Yen.
Central Bank Rate
The Central Bank of Kenya reduced the rate to 12.75% in Q3 2024, down from 13.00% in July.
Financial Market Trends
The Nairobi Securities Exchange (NSE) 20 Share Index rose by 17.8%, reflecting increased investor confidence. However, the volume of shares traded dropped by 21.2%.
Challenges and Opportunities
While sectors like agriculture and tourism showed resilience, manufacturing and construction faced significant hurdles. The diversification of economic drivers and further easing inflation may provide opportunities for sustained growth.