Kenya’s economy is estimated to have expanded by 5.5 per cent during the third quarter of 2014 compared to a revised growth of 6.2 per cent in the same period of 2013 The growth was mainly supported by strong expansions of activities in construction; finance and insurance; wholesale and retail trade; information and communication; and agriculture and forestry.
All the sectors of the economy recorded positive growths except accommodation and food services (hotels and restaurants) which has consistently been on the decline since last year. During the quarter, most of the macroeconomic indicators remained relatively stable. The Kenya Shilling exchanged at an average of 88.3 against the US dollar compared to KSh 87.3 recorded in 2013. Similarly, the Shilling was stable against the Euro, Uganda and Tanzania Shillings but appreciated significantly against the Yen and South African Rand. On the other hand, the Kenya Shilling depreciated considerably against the Sterling Pound to exchange at an average of KSh 148.6 compared from an average of KSh 135.3 during the same quarter of 2013.
During the quarter under review, inflation averaged at 7.54 per cent, which was slightly higher than the Central Bank’s target of between 2.5 to 7.5 per cent, in comparison to an average of 6.99 per cent during a similar quarter last year.
The rise in inflation was mainly on account of increase in prices of food and beverage and transport costs in the months of July and August. However, inflation eased downwards during the month of September. During the review period, transport charges went up despite the fall in the international oil prices. Average Murban ADNOC crude oil prices (US$/barrel) decreased by 6.4 per cent during the review quarter compared to the same quarter of 2013.