Kenya has jumped to Africa’s ninth largest economy with an average income of US$1,246 and a Gross Domestic Product (GDP) size of US$55.2 billion, down from the previous US$44.1 billion, PANA reported.
Kenya National Bureau of Statistics (KNBS) Director-General, Zachary Mwangi, said in a report released Tuesday, that the economy jumped 25.3% higher after the recalculation of the national statistics, known as rebasing.
“Economies are dynamic in nature. They grow, they add new sectors, new products and new technologies and consumer behaviour and taste change over time,” Mwangi said while releasing the new statistics of the rebased economy.
The new GDP growth rate has also been revised to 5.7% in 2013 from 4.7%.
Kenya overtook Ghana, Tunisia and Ethiopia, to become the ninth largest economy, after Nigeria, South Africa, Egypt, Angola, Morocco, Libya and Sudan.
Mwangi said the rebasing is used to account for the changes in the national economy to give a more current snap shot of the economy.
The new figures do not exactly show any dramatic difference in the structure of the economy in the defined categories but reveal previous miscalculations.
Razia Khan, Managing Director and Head of Research at Standard Chartered Bank, said the rebasing confirmed previously held view that the economy was growing much higher than previously measured.
“The revised growth rates also suggest that Kenya’s output gap has been closing faster than previously believed. This should have implications for monetary policy and supports our view that the Central Bank may have to tighten policy,” she said in a statement emailed to PANA.
Kenya now enters the Middle Income status but will still qualify for some level of donor funding.
“The rebasing does not necessarily mean the country has become richer,” Mwangi said. “Instead, it provides an update measure of the economy putting into consideration the relevant fundamentals.”
Kenya is under the World Bank’s category of lower middle income nations as the GDP per capita now stands above the World Bank’s benchmark of US$1,036.
Financial analysts say the move to the middle income status will disqualify Kenya from some categories of concessional lending from the World Bank.
“Given the increasing reliance on non-concessional lending, this is not likely to have any immediate impacts on the market,” Khan said.
The new figures show emerging sectors gaining more significance in the economy, including Real estate – 8.2% and ICT, which was previously not treated as an independent economic sector in previous estimates.
It shows agriculture is still the backbone of the economy, with a five-year average 2009 to 2013 share 24.1% to 25.4% of the economy while the manufacturing contribution to GDP increased from 9.5% to 11.3%.