A quarterly GDP report released by the Kenya Bureau of Statistics (KNBS) Tuesday indicates Kenya’s economy underperformed in the second quarter posting a 5.2 percent jump, a more sluggish rate compared to 6.8 percent in the first quarter and 11 percent in a similar period last year.
The report termed sustained inflationary pressures and a prolonged drought as the main drawbacks to economic growth even as the country grapples with multiple poor rain seasons since the 2020 short rains.
Below-average rainfall blighted the country’s rain-fed agriculture leading to poor production and a food commodities supply shortage which in turn fed into the high inflation that has gradually eroded consumers’ purchasing power and weakened spending.
KNBS reported that agriculture declined by 2.1 percent in the review period with the deficient showing bearing on exports of vegetable and cut flowers, and production of tea, coffee and milk.
“Agriculture, forestry and fishing activities’ value added contracted for the third consecutive quarters, mainly attributed to unfavourable weather conditions that characterised the last quarter of 2021 and the first half of 2022,” read the report.
“The performance of the sector was evident in the significant decline in exports of vegetable and cut flowers, and production of tea, coffee and milk.”
Further, persistent inflation weighed on economic activity averaging 7.16 percent in the quarter under focus compared with 5.98 percent a year earlier.
The spike in inflation was principally driven by escalating food and fuel costs in the wake of the Russia-Ukraine conflict which exacerbated global supply chain disruptions that were yet to recover from pandemic shocks.
Manufacturing also fared poorly slowing to 3.6 percent in the second quarter of 2022 from 11.3 percent in the same quarter last year.