Kenya’s economic growth experienced a deceleration, registering at four percent in the third quarter of 2024, even with diminishing inflationary pressures and a strengthened shilling.
Recent statistics from the Kenya National Bureau of Statistics (KNBS) indicate that the economy contracted by 2% when compared to the 6% growth recorded during the same quarter in 2023.
Abdulkadir Awes, the KNBS Director of Population and Social Statistics, attributed this slowdown to a reduction in growth across various sectors of the economy.
The data reveals that the growth in the third quarter was hindered by declines in the construction, mining, and quarrying sectors.
Specifically, construction activity decreased by 2%, while the mining and quarrying sectors experienced a significant contraction of 11.1% during the reviewed period.
Despite some growth in agriculture, transport, and real estate, these sectors were not sufficient to maintain an overall positive growth trajectory.
Notable growth was observed in forestry and fishing at 4.2%, transportation and storage at 5.2%, financial and insurance activities at 4.7%, and real estate activities at 5.5%.
During this quarter, the Kenyan Shilling appreciated against major currencies compared to Q3 2023, gaining 10.1% against the U.S. dollar, 9.3% against the Euro, and 7.7% against the Pound Sterling.
Regionally, the Kenyan Shilling strengthened by 21.2% against the Tanzanian Shilling and 11.7% against the Ugandan Shilling. However, it depreciated by 12.7% and 6.7% against the Japanese Yen and South African Rand, respectively.
The economy also encountered difficulties in the capital markets, as the number of shares traded on the Nairobi Securities Exchange (NSE) fell from 424 million in September 2023 to 334 million in September 2024.
As a result, the total value of shares traded decreased from 5.2 billion shillings to 5.0 billion shillings, indicating a decline in market activity.
Nonetheless, the NSE 20 share index increased from 1,508 points in September 2023 to 1,776 points in September 2024, suggesting an improvement in equity market performance despite the reduction in trading volumes.
