Kenya’s economy posted a 4% growth in the third quarter of 2024, a significant slowdown from the 6% growth recorded in the same period of 2023.
According to the latest data from the Kenya National Bureau of Statistics (KNBS), the deceleration was largely attributed to a general decline in growth in most sectors of the economy even as inflation eased to 4.08%.
” The growth was constrained by contractions in construction, mining and quarrying activities. Construction activities contracted by 2.0%, while mining and quarrying saw a decline of 11.1% in the quarter under review”, said KNBS in its Quarterly Gross Domestic Product Report.
However, the overall growth was supported by strong performances in several sectors, including Agriculture, Forestry, and Fishing (4.2%), Transportation and Storage (5.2%), Financial and Insurance activities (4.7%), Real Estate (5.5%), Wholesale and Retail (4.8%), and Accommodation and Food Services (13.7%).
At the same time, inflation reduced to 4.08% in the third quarter of 2024, down from 6.93% during the same period in 2023. This drop was driven by lower food and beverage prices, as well as a 10.1% appreciation of the Kenyan Shilling against the US Dollar.
On average, the Kenyan Shilling gained ground against the US Dollar, Euro and Pound Sterling by 10.1 per cent, 9.3 per cent and 7.7 per cent, respectively.
Sectoral Analysis
The Agriculture, Forestry, and Fishing sector grew by 4.2 per cent driven by favorable weather conditions that boosted sugarcane and milk production. Sugarcane deliveries surged to 2,523.5 thousand metric tonnes, up from 874.0 thousand metric tonnes in Q3 2023.
SGR
Although the Transportation and Storage sector recorded growth due to increased consumption of light diesel and higher port throughput, Standard Gauge Railway (SGR) services experienced a decline.
The number of passengers ferried dropped by 7.2%, from 701,132 passengers in the third quarter of 2023 to 650,352 passengers during the review period.
Similarly, freight transported via SGR contracted by 0.8 per cent to stand at 1,720.3 thousand metric tonnes during the period under consideration compared to 1,735.0 thousand metric tonnes in the third quarter of 2023.
NSE
The number of shares traded in the Nairobi Securities Exchange declined from 424 million in September 2023 to 334 million in September 2024.
Similarly, the total value of shares traded decreased from KSh 5.2 billion in September 2023 to KSh 5.0 billion in September 2024, signalling reduced market activity.
However, the NSE 20 Share Index increased from 1,508 points to 1,776 points indicating a better performance in the equity market despite the decline in the number of shares traded.
