Kenya Quarterly Gross Domestic Product First Quarter 2015

The first quarter of 2015 experienced relative stability in key macroeconomic indicators. The Kenya Shilling strengthened significantly against all its major trading currencies but depreciated by 6.0 per cent against the US dollar. The current account worsened despite cheaper oil prices mainly due to a significant increase in the import bill against a contraction in export earnings. Interest on commercial bank loans declined by 8.7 per cent to average at 15.52 per cent during the quarter under review compared to an average of 17.00 per cent during the first quarter of 2014. The Central Bank Rate (CBR) was maintained at 8.5 per cent throughout the quarter. Inflation eased downwards to an average of 5.8 per cent compared to 6.8 per cent recorded in the same quarter of 2014. The decline in inflation was mainly driven by a significant drop in oil prices during the review period. The decrease in oil prices also contributed to lower costs of electricity and transport services. Increased generation of geothermal electricity coupled with a reduction in thermal generation also contributed to lower cost of electricity during the review period. However, increased prices of vegetables and some key food products, in the first two months of the year, worked against the cost of living and led to a moderate level of inflation during the quarter.