Kenya Quarterly Gross Domestic Product Second Quarter 2018

Abstract

The country's real Gross Domestic Product (GDP) is estimated to have expanded by 6.3 per cent in the second quarter of 2018 compared to 4.7 per cent during a similar quarter in 2017. The growth was against a backdrop of a fairly stable macroeconomic environment and favorable weather conditions. During the review period, the country experienced heavy rains that impacted positively on most of the agricultural and generation of hydroelectricity activities. Analysis by sector showed that activities of agriculture, and electricity and water supply recorded significant improvements to grow by 5.6 per cent and 8.6 per cent compared to growths of 0.8 per cent and 6.0 per cent, respectively during the second quarter of 2017. Accommodation and food service and Information and communication recorded the highest growths of 15.7 per cent and 12.6 per cent, respectively in the quarter under review. On the other hand, activities of the mining and quarrying and construction recorded the most notable deceleration in growths during the review period.

Inflation rate eased downward significantly to average at 3.98 per cent during the quarter under review compared to 10.8 per cent in the same period of 2017. The slowdown in inflation was mainly occasioned by prices of food and non-alcoholic beverages that remained largely unchanged. On the other hand, there was substantial rise in the prices of fuels and transportation charges due to increase in the international oil prices. The retail price of light diesel rose significantly to average at KSh 104.85 in the review quarter from KSh 87.95 during a similar period in 2017. The increase in fuel prices was mainly on account of a 45.2 per cent rise in the international crude oil prices during the quarter under review compared to the same period in 2017. The Kenyan Shilling recorded mixed performance against its major trading currencies gaining against the US dollar, the Japanese Yen, Ugandan Shilling and Tanzanian Shilling but lost against the Euro, Pound Sterling and the South African Rand.