First Quarter 2015 : Quarterly Gross Domestic Product and Balance of Payments


The first quarter of 2015 experienced relative stability in key macroeconomic indicators. The Kenya Shilling strengthened significantly against all its major trading currencies but depreciated by 6.0 per cent against the US dollar. The current account worsened despite cheaper oil prices mainly due to a significant increase in the import bill against a contraction in export earnings. Interest on commercial bank loans declined by 8.7 per cent to average at 15.52 per cent during the quarter under review compared to an average of 17.00 per cent during the first quarter of 2014. The Central Bank Rate (CBR) was maintained at 8.5 per cent throughout the quarter.

Inflation eased downwards to an average of 5.8 per cent compared to 6.8 per cent recorded in the same quarter of 2014. The decline in inflation was mainly driven by a significant drop in oil prices during the review period. The decrease in oil prices also contributed to lower costs of electricity and transport services. Increased generation of geothermal electricity coupled with a reduction in thermal generation also contributed to lower cost of electricity during the review period. However, increased prices of vegetables and some key food products, in the first two months of the year, worked against the cost of living and led to a moderate level of inflation during the quarter.

The country’s economic performance improved to 4.9per cent during the first quarter of 2015 compared to a growth of 4.7 per cent realized in the same quarter of 2014. The growth was mainly supported by strong expansions of activities of Construction; Finance and Insurance; Information and Communication; Electricity and Water Supply; Wholesale and Retail Trade; and Transport and Storage. All the sectors of the economy recorded positive growths of varying magnitudes except the Hotels and Restaurant whose growth contracted. This was the fifth consecutive decline in growth which is mainly attributed to low hotel occupancy rates arising from insecurity concerns mainly by international visitors. Download First Quarter 2015 Quarterly Gross Domestic Product and Balance of Payments