Fin24

Kenya's economy to grow by 5%

By: Reuters 2012-12-24 13:34
Nairobi - Kenya's economy expanded by 4.7% in the third quarter of this year from 4% in the same period last year, boosted by agriculture and manufacturing, the statistics office said on Monday.

On a seasonally-adjusted basis, east Africa's biggest economy grew by 2.2% in the third quarter, up from 0.5% in the second.

"The expansion was more robust in comparison to the preceding quarters of 2012 primarily due to strong performances of the agriculture and forestry, fishing, manufacturing, transport and communication and a turnaround in the performance of the electricity industry," the Kenyan National Bureau of Statistics said in a statement.

Economic growth in Kenya has been sluggish in the first half of the year as the economy expanded by 3.4% and 3.3% in the first two quarters, when key sectors like construction sagged under the weight of high interest rates.

Kenya's current account deficit narrowed 21% to 105.4bn shillings ($1.23bn) from 133.5bn during the same period last year. However, the deficit widened compared to 63.3bn shillings recorded in the second quarter of 2012.

A Reuters poll shows the economy should accelerate to 5.5% growth next year assuming March 2013 elections are peaceful and benign inflation gives the central bank room to cut official interest rates further.

The finance ministry has said the economy will grow 5.6% in 2013, outpacing this year's forecast of 5.1%, thanks to strong rains boosting farm output.
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