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Kenya: Kenyan economy slows down in face of terror attacks

Kenya’s economy slowed down to 4.1% in the first quarter of 2014, compared to 5.2% growth recorded in 2013, the national statistics body said.

The economic slowdown resulted from the series of terrorist attacks which have substantially affected the tourism industry, the Kenyan National Bureau of Statistics (KNBS) said late Monday.

It said the slowdown in the tourism and agricultural sectors largely affected growth in the first quarter.

The 4.1% growth during the period was a result of the growth in the transport and communication sector, the manufacturing, wholesale and retail trade as well as the mining and quarrying business.

“The deceleration in growth of the hotel industry was due to the insecurity coupled with negative travel advisories by key tourist source countries,” KNBS said in a statement obtained by PANA here.

It said the hotel sector recovered slightly from a negative 12.8% in 2013 to record a negative 3% growth in the first quarter of 2014.

The beach hotels recorded low or zero bed occupancy due to the insecurity in the coastal region, which has been targeted for terror attacks.

Foreign governments, including the United States and Britain, have issued travel advisories and evacuated their nationals from the coastal region.

On the macroeconomic front, the Kenya Shilling weakened drastically against the US dollar and the Euro but strengthened against the Japanese Yen and the South African Rand.

Inflation averaged 6.78 % compared to an average of 4.08% recorded in 2013.

Meanwhile, Kenya’s balance of payment position has improved drastically from a deficit of Ksh12.4 billion (US$139 million) in 2013 to a surplus of Ksh8.1 billion (US$91 million).

The surplus was due to the decline in merchandise imports and an increase in export earnings.


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