Kenya’s economic growth between April and June in 2019 stagnated at 5.6 percent for a second consecutive quarter.
The growth recorded during the second quarter was a further drop compared to 6.4 percent growth rate recorded during the same period in 2018.
According to the Kenya National Bureau of Statistics (KNBS), the decline in Kenya’s GDP growth was mainly due to a slowdown in the agriculture, manufacturing and transport sectors.
Early this year, the World Bank projected that Kenya’s economy would experience a 5.7 percent economic growth rate in 2019. The latest quarterly economic growth numbers released by the KNBS indicated that the country’s GDP grew by 5.6 percent, pointing to a stagnation in Kenya’s economic growth since the start of 2019.
KNBS intimated that the agricultural sector, which is Kenya’s biggest economic sector by GDP contribution, is estimated to have grown by 4.1 percent during the second quarter compared to 6.5 per cent in the second quarter of 2018.
The slowed growth was mainly attributed to delayed long rains that curtailed agricultural production particularly in the tea industry and horticulture sub-sector.
The manufacturing sector posted a slowed growth of 4.2 percent in the second quarter of 2019 compared to a 4.7 percent growth during the same quarter of 2018.
This was despite a growth in the production of sugar, milk and dairy products, as well as edible fats and margarine.
The transportation sector registered a 7.2 percent growth in the review quarter compared to 8.4 per cent growth recorded in the same quarter in 2018 and was undermined by a rise in fuel prices during the second quarter of the year.
Performing economic sectors.
Nonetheless, Communication sector in the country posted the fastest growth of 11.6 percent from 11 percent in 2018, fueled by double digit growth in mobile phone, mobile money and internet subscriptions.
The financial and insurance sector recorded an accelerated growth of 6.7 percent in the quarter under review compared to a growth of 4.6 percent in the corresponding quarter of 2018.
The release of the second quarter GDP numbers comes against a growing list of companies announcing job cuts in order to stay afloat.
Companies in the country which have announced job cuts over the last three months include Sanlam Kenya’s insurance subsidiary, Telkom Kenya, Stanbic bank, East African Portland Cement Company and East Africa breweries.