Kenya’s Economy Grew 5.8 Percent Last Year, According To Statistics

Posted by: lukwago J in Business April 20, 2017

NAIROBI – Kenya’s economy grew 5.8 percent last year, just above 5.7 percent growth the previous year but still slightly short of forecasts, the statistics office said on Wednesday.

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Government officials in the East African nation, which holds a general election in August, initially estimated the economy to have expanded by 5.9 percent.

A recovery in tourism, boosted the number but other sectors, such as farming and the construction sector grew at a slower rate, the director general of the Kenya National Bureau of Statistics, Zachary Mwangi, said. “The tourism sector had a remarkable recovery as it benefited from improved security,” he said at the launch of the annual economic survey.

He said the main risks facing economic growth this year were internal, after an acute drought depressed output in the first quarter and drove up food prices.

“Key crop growing regions are expected to receive late and inadequate rains,” Mwangi said. Farming, including exports of tea and coffee, accounts for more than a quarter of annual output in the region’s largest economy.

Most experts expect the economic expansion to slow down this year due to the drought and sluggish private sector credit growth. The World Bank said last week the economy is likely to grow by 5.5 percent in 2017.

The shilling was expected to be stable this year, Mwangi said, attributing it to solid foreign exchange reserves held by the central bank and a sustainable current account deficit.

The data released on Wednesday showed the current account deficit narrowed 11.9 percent last year to 5.2 percent of GDP. The overall balance of payments swung to a small surplus last year from a deficit in the previous year.

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Tourism has also boosted kenya’s economy

In the tourism sector, visitor numbers rose to 1.34 million from 1.18 million the prior year, with earnings rising 17.8 percent to 99.7 billion shillings ($964.68 million), Mwangi said. Hotel room occupancy also rose.

The information, communication and technology sector also grew at a faster pace, Mwangi said, thanks to growth in the number of mobile phone users and Internet subscriptions.

($1 = 103.3500 Kenyan shillings)

Source: Reuters

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