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The Kenyan economy grew by 5.8 percent in the third quarter of 2015. The economy recorded 5.2 percent growth in a similar quarter in 2014, according to a statement published by Kenya National Bureau of Statistics (KNBS) on Wednesday.

The third quarter Gross Domestic Product (GDP) growth was driven mainly by strong expansions in agriculture, construction, finance and insurance, wholesale and retail, as well as transport and storage.

According to the KNBS, the inflation rate eased to 6.14 percent year-on-year in Q3 2015, from 7.54 percent recorded in the corresponding quarter of 2014. The KNBS said the fall in the inflation rate was mainly due to decrease in transportation costs in line with the global fall in oil prices.

“During the quarter, most of the macroeconomic indicators remained relatively stable,” the KNBS said.

The construction sector recorded the fastest growth of 14.1 percent in the quarter under review, compared with 8.8 percent recorded in the corresponding quarter of 2014.

During the third quarter 2015, the agriculture sector is estimated to have expanded by 7.1 percent, compared to 6.8 percent recorded in Q3 2014.

The electricity supply sector grew by 11 percent in Q3 2015, compared with 7.2 percent recorded in same quarter of 2014. The KNBS attributed the sector’s growth to the increased share of both geothermal and hydroelectric power generations coupled with a significant reduction in generation of the more expensive thermal electric power.

The tourism sector, represented by the accommodation and restaurants sector, contracted by 2.3 percent in Q3 of this year, compared with a 20.5 percent contraction in the corresponding quarter of 2014.

The KNBS said the suppressed performance of the tourism sector could be attributed to the terrorist attacks and negative travel advisories issued by key tourist source countries.

“Bed occupancy, which is a key performance indicator of the sector, remained on a downward trend though at decelerated rate,” KNBS said.
In June, the United Kingdom, which accounts for over 50 percent of tourists in Kenya, lifted a negative travel advisory covering most of the coast where game parks and Indian Ocean beach resorts are located.

Chibuike Oguh is Financial Nigeria's Frontier Markets Analyst