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Kenya’s economy contracted by 1.1% in Q3 in 2020

NAIROBI, (The Southern African Times) – Kenya’s economy contracted by 1.1 percent in the third quarter of 2020 compared to a growth of 5.8 percent in the same quarter of 2019, the government statistics agency said on Thursday.

Kenya National Bureau of Statistics (KNBS) said that economic performance in the third quarter of 2020 remained depressed but relatively better compared to the second quarter of 2020.

“During the quarter in review, the performance, albeit constrained, was supported by a significant improvement in agricultural production and accelerated growths in mining and quarrying, construction, and public administration,” the KNBS said in a statement.

“Strong growths in information and communication, financial and insurance, and real estate also supported growth from a deeper contraction,” it said.

According to KNBS, the contraction experienced in the third quarter was much lower than that recorded during the previous quarter largely due to the partial easing of COVID-19 containment measures that facilitated gradual resumption of a number of economic activities.

Macdonald Obudho, KNBS director-general said that the agriculture, forestry and fishing sectors recorded a growth of 6.3 percent in the third quarter of 2020 compared to 5.0 percent growth in the third quarter of 2019.

“The impressive performance was supported by increases in tea production, exports of fruit and sugarcane production,” Obudho added.

He observed that the robust growth in agricultural activities was also driven by favorable weather conditions witnessed in the first three quarters of the year.

Obudho revealed that the manufacturing sector is estimated to have contracted by 3.2 percent in the third quarter of 2020 compared to 3.9 percent growth in the corresponding quarter of 2019.

“The contraction was shown in the various food sub-sectors such as the manufacture of meat and meat products, manufacture of liquid milk, manufacture of wheat flour, manufacture of beverages and manufacture of grain mill products,” he said.

According to the report, the manufacture of edible fats and oils, and the manufacture of cigarettes expanded in the review period.

The bureau noted that the construction sector recorded a 16.2 percent growth in the third quarter of 2020 compared to 6.6 percent growth in the corresponding quarter of 2019.

According to the data agency, the growth was evidenced in the volume of cement consumed which increased by 23.5 percent between the third quarter of 2019 and the review period.

KNBS said that import values of construction-related materials such as timber, wood products, bitumen, lime, cement, plumbing materials and glass products also increased in the quarter under review.

Obudho added that the electricity and water supply sectors expanded by 4.7 percent in the period under review compared to 6.4 percent growth in the third quarter of 2019.

“Total volume of electricity produced increased marginally by 0.8 percent in the third quarter of 2020 compared to 2.1 percent growth in the third quarter of 2019,” he added.

The official observed that the transportation and storage sector grew by 2.9 percent in the review period compared to 7.6 percent growth in the third quarter of 2019.

“The sector’s performance was curtailed by contractions in activities of air transport and Standard Gauge Railway (SGR) passenger transport which had not picked up despite easing of COVID-19 containment measures,” he noted.

KNBS revealed that the SGR passenger transport contracted by 77.5 percent while freight movement through SGR expanded by 8.8 percent in the third quarter of 2020.

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