Kenya’s Gross Domestic Product (GDP) is estimated to have expanded by 5.8 per cent in 2016 compared to a revised growth of 5.7 per cent in 2015. Accommodation and food services recorded improved growth of 13.3 per cent in the year under review compared to a contraction of 1.3 per cent in 2015. The other sectors that registered significant improved performance in economic activities were in the information and communication; real estate; and transport and storage. Persistent drought hampered growth in the fourth quarter of 2016 impacting negatively on agriculture and electricity supply. On the other hand, growth in construction; mining and quarrying; and financial and insurance activities decelerated in 2016. From the demand side, growth was buoyed by consumption in both the public and private sector.
Annual average inflation eased to 6.3 per cent in 2016 compared to an average of 6.6 per centin 2015. This was mainly due to decline in prices of transportation; housing and utilities; and communication. The Shilling strengthened against the Pound Sterling, South African Rand, Ugandan Shilling, Tanzanian Shilling and the Rwandan Franc but weakened against the US Dollar, Euro, and the Yen in 2016. The capping of interest rates to a maximum of 4.0 per cent above the Central Bank Rate (CBR) resulted in a significant decline in interest rates during the month of September to 13.84 per cent compared to 16.75 in a similar month in 2015.
Domestic credit slowed from a growth of 20.8 per cent in 2015 to 6.4 per cent in 2016 mainly on account of a decline in credit to the private sector. The current account deficit narrowed to KSh 370.8 billion in 2016 from a deficit of KSh 421.1 billion in 2015. The fiscal deficit in 2016/17 as a percentage of GDP is expected to rise to 9.9 per cent compared to 8.6 per cent in 2015/16.
SPEECH DELIVERED BY MR. WILSON IRUNGU NYAKERA, PRINCIPAL SECRETARY, STATE DEPARTMENT FOR PLANNING AND STATISTICS, DURING THE LAUNCH OF 2017 ECONOMIC SURVEY REPORT AT KICC-AMPHITHEATRE, 19TH APRIL, 2017