Kenya Quarterly Gross Domestic Product Third Quarter 2018

Provisional estimates of gross domestic product indicate that the economy expanded by 6.0 per cent during the third quarter of 2018 which was an improvement compared to a 4.7 per cent growth during a similar quarter in 2017. So far, the economy has performed better in the first three quarters of 2018 compared to similar period of 2017. Seasonally adjusted gross domestic product, which compares consecutive quarters, grew by 0.9 per cent in the third quarter of 2018 compared to 1.3 per cent recorded in the second quarter of 2018. Favorable weather conditions and a stable macroeconomic environment created a conducive environment for the growth during the period under review (third quarter, 2018). The growth was mostly supported by pickup in activities of agriculture, construction, and electricity and water supply. A rebound in activities of the manufacturing sector also contributed significantly to the improved performance during the review period. Despite recording deceleration in growths, activities of accommodation and food services and information and communication attained the highest growths of 16.0 per cent and 9.1 per cent, respectively, during the quarter under review. The period under review was characterized by low inflation, improved exchange rate of the Kenyan Shilling against its major trading currencies, a narrowing of the current account deficit and a slight decline in interest rates compared to the same period in 2017. Inflation was contained within the target range during the quarter at an average of 4.7 per cent. During the quarter under review, weighted interest rates on commercial bank loans and advances averaged at 12.8 per cent compared to 13.7 per cent in the corresponding period of 2017. The current account deficit narrowed to KSh 116.0 billion during the third quarter 2018 from KSh 150.9 billion in the corresponding period of 2017 mainly due to a reduction in the import bill and improved performance of agricultural exports, increased diaspora remittances and notable growth in tourism earnings.