Kenya Quarterly Gross Domestic Product Third Quarter 2016

The economy is estimated to have expanded by 5.7 per cent in the third quarter of 2016 compared to a growth of 6.0 per cent in the same quarter of 2015. The key macroeconomic indicators remained largely stable during the third quarter of 2016. Inflation was contained within the Central Bank's target to average at 6.3 per cent compared to an average of 6.1 per cent during the same quarter in 2015. The slight increase in inflation was primarily due to increases in prices of food and beverages during the period under review. This rise was however countered by significant decreases in prices of utilities and transport. Internationally, Murban ADNOC prices (US$/barrel) declined by 9.3 per cent during the quarter compared to the same quarter of 2015. In the money market, the Kenyan Shilling strengthened against the US dollar, Euro, Sterling pound, South African Rand and the Tanzanian Shilling but weakened against the Yen and the Ugandan Shilling during the quarter compared to a similar period in 2015. The amendment of the Banking Act in August 2016 to cap the lending rates to a maximum of 4.0 per cent above the Central Bank Rate (CBR) resulted to a substantial decline in the interest rates during the month of September to 13.84 per cent from 16.75 per cent in the same month of 2015. The current account deficit narrowed by 10.4 per cent to a deficit KSh 100,687 million in the third quarter of 2016 from a deficit of KSh 112,377 million during the same quarter of 2015. The overall balance of payments also improved from a deficit of KSh 51,356 million in the third quarter of 2015 to KSh 5,710 million during the quarter under review.