Kenya Quarterly Gross Domestic Product Second Quarter 2008

The first quarter growth figure has been revised upwards to negative 1.0 per cent the in view of the availability of more data. The economy seems to have rebounded in the second quarter of 2008, during which it is estimated to have expanded by 3.2 per cent compared to a growth of 8.9 per cent in the same quarter of 2007. However, this was the lowest growth for the second quarter under review since 2003 when the growth was 0.4 per cent. The slower growth is a reflection of the spillover effects in certain sectors of the post-election violence but it should be noted that the second quarter relative to the first quarter improvement has only been exceeded once since 2001. As in the first quarter, Hotels and Restaurants, and Transport and Communication recorded negative growths indicating that the effects of the violence continued to be felt in the second quarter within these sectors. Manufacturing, Electricity and Water, Wholesale and Retail Trade, and Fishing performed better than in the first quarter of 2008 which is a sign of start of recovery during the second quarter. However, their growths were significantly lower than the second quarter of 2007. On the contrary, construction, mining and quarrying, and public administration posted improved growths compared the same quarter of 2007. Improved growths in Construction is attributable to the fact that key long term construction activities which have been underway and were only interrupted temporarily by the violence but resumed the growth path soon after. The bulk of Mining and Quarrying output feeds into construction thus the sector moved in the same direction as Construction. Growth in Public Administration was mainly due to increased employment levels within central government leading to increased output in this sector.