Kenya Quarterly Gross Domestic Product Second Quarter 2023

Abstract

This report evaluates Kenya’s economic performance in the second quarter of 2023. The economy grew by 5.4 per cent in the second quarter of 2023 compared to 5.2 per cent growth in the corresponding quarter of 2022. The growth was primarily underpinned by rebound in the agricultural activities, that grew by 7.7 per cent during the period under review. Other sectors that supported growth during the period under review included; Financial and Insurance (13.5%); Accommodation and Food Service (12.2%) and; Information and Communication (6.4%). During the period under review, most macroeconomic indicators exhibited an upward trend. The GDP growth rates for the second quarter for the period 2019- 2023 is presented in Figure 1. Figure 2 shows inflation rate for the period 2019- 2023 while Figure 3 shows the exchange rate for the Kenyan Shilling against the US Dollar for the same period.

Central Bank Rate (CBR) was reviewed upwards to 10.50 per cent as at June 2023 from 9.50 per cent in April and May 2023 compared to 7.50 per cent in the second quarter of 2022. Inflation rose from an average of 7.15 per cent in the second quarter of 2022 to 7.94 per cent in the second quarter of 2023, primarily due to higher food and energy prices. In the second quarter of 2023, the Kenyan Shilling depreciated against most of the major foreign currencies compared to the corresponding quarter of 2022. Specifically, the Kenyan Shilling, on average, lost ground against Euro by 20.2 per cent, US Dollar by 18.0 per cent and the Pound Sterling by 17.0 per cent during the second quarter of 2023. Similarly, the Kenyan shilling depreciated against the Ugandan shilling and Tanzanian shilling in the second quarter of 2023. However, the Kenyan currency appreciated against South African Rand during the review period.