Kenya: GDP rebounds in Q4 2020
According to a recent release by Kenya’s Statistical Institute, GDP expanded 1.2% in annual terms in the fourth quarter of 2020, contrasting the 2.1% contraction tallied in the prior quarter, and expanding for the first time since Q1 2020. As a result, the economy contracted a marginal 0.3% in 2020 as a whole (2019: +5.0%), logging the first contraction in nearly three decades.
Looking at the details of the release, growth accelerated in the mining and quarrying sector (Q4: +9.2% yoy; Q3: +7.0% yoy), the construction sector (Q4: +15.7% yoy; Q3: +12.3% yoy), the information and communication sector (Q4: +7.6% yoy; Q3: +3.2% yoy), the financial and insurance sector (Q4: +7.4% yoy; Q3: +3.0% yoy), the electricity and water supply sector (Q4: +3.5% yoy; Q3: +0.2% yoy) and the all-important agricultural sector (Q4: +5.8% yoy; Q3: +4.2% yoy). Moreover, the manufacturing sector (Q4: +3.8% yoy; Q3: -1.7% yoy) and the wholesale and retail trade sector (Q4: +2.6% yoy; Q3: -5.0%) bounced back to growth.
Meanwhile, all remaining sectors contracted at a milder pace compared to the previous quarter. That said, although the decline in the accommodation and restaurant sector softened, it remained marked, as high numbers of Covid-19 cases in the period and tight restrictions globally dampened tourism-related activity.
The economy should return to growth this year, as gradually easing Covid-19 curbs amid declining new infections release pent-up demand. However, much remains tied to the pandemic, with new variants clouding the outlook, particularly in light of the country’s severely low vaccination rate, with less than 5% of the population being fully vaccinated by September.
The economy should return to growth this year, as gradually easing Covid-19 curbs amid declining new infections release pent-up demand. However, much remains tied to the pandemic, with new variants clouding the outlook, particularly in light of the country’s severely low vaccination rate, with less than 5% of the population being fully vaccinated by September.