Kenya economy surpasses pre-pandemic levels in Q1 – Business Daily
Matatus at Tea Room bus stage in Nairobi. The transport sector supported the economic rebound. PHOTO | NMG
Kenya’s economy rebounded above pre-pandemic levels with the gross domestic product (GDP) expanding 6.8 percent in the first quarter of this year.
The latest Kenya National Bureau of Statistics (KNBS) data shows the GDP was up from 2.7 percent last year and 4.4 percent in 2020 on recovery in the transport, food and service sectors.
The sectors flourished as a result of the reopening of the economy as compared to similar periods during which Covid-19 curbs had been imposed by the government to contain the spread of coronavirus.
Agriculture, Kenya’s mainstay economic activity, however, contracted in the first quarter attributed to depressed rainfall during the fourth quarter of 2021 as well as delayed onset of rains during the quarter under review.
“The performance was supported by rebounds in most economic activities that had contracted significantly in the first quarter of 2021 due to measures instituted to curb the spread of Covid-19,” KNBS said.
Kenya’s economy has rebounded strongly post-Covid with last year numbers placing GDP growth 7.5 percent- the fastest pace in 11 years.
Treasury estimates the economy will grow at six percent this year driven by strong growth in the services sector and expansion in industrial output.
Read: Economy grows fastest in 11 years on easing Covid curbs – VIDEO
The pace of economic activity was speeded by accommodation and food services which expanded 56.2 per cent in the first quarter of 2022, from a contraction of 33 percent, on higher tourist numbers as Covid-19 curbs were relaxed.
The number of visitors’ arrivals through Jomo Kenyatta International Airport and Moi International Airport rose by 85.1 percent from 121,739 in the first quarter of 2021 to 225,321 visitors in the first quarter of 2022.
Some of the hotels shut down during the pandemic were reopened and industry hires resumed as demand picked up.
The economy was also buoyed by growth in the financial and insurance sector as money supply grew amidst accommodating monetary policy.
Cash circulating outside the banking system hit a four-month high of Sh252 billion in April, an indicator of economic recovery as Kenyans determined to ride the post-Covid rebound.
Transport sector also expanded 8.1 percent in the first quarter of 2022 compared to a contraction of 7.9 percent in the corresponding quarter of 2021 on lifting of Covid-19 curbs.
Growth was, however, tempered by dismal performance in agriculture, a slump in electricity and water supply and a slowdown in construction activity.
The World Bank projects the Kenyan economy will slow down to 5.5 percent this year amidst concerns over the impact of drought and increased commodity prices.
The Bank said the country will receive below-average rains that will negatively affect agricultural performance leaving nearly 3.1 million Kenyans in need of food aid.
The country growth will also be dampened by high commodity prices triggered by the war in Ukraine that is driving inflation in the country.
