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Kenyan economy posts 4.7% growth after brief recession

Kenya’s economy recovered massively from a near recession in the first and second quarter to post a 4.7% growth in the third quarter, boosted by agriculture, fishing and forestry industries.

The East African nation returned its lowest growth from April to June, when economic growth hit a near standstill at 0.5%, possibly due to high interest rates and the Central Bank monetary tightening.

According to the quarterly report of the Kenya National Bureau of Statistics (KNBS), the economy grew by 2.2% in the first quarter, January to March, before recording a slump, due to low exports and terrorism threats.

The third quarter growth was much better than the 4% growth posted in 2011.

Kenya’s traditional growth drivers, the building and construction, mining, hotels and restaurants, all recorded an economic slowdown during the quarter.

The hotels sector received minimum figures as tourist arrivals at the main gateway the Jomo Kenyatta International Airport showed arrivals at 342,135 in 2012, compared to 383,110 in 2011.

Growth within the hotel industry was much worse at just 1.1% in 2012, compared to 2.1% in 2011. The decline was attributed to the economic slowdown witnessed in Europe and the United States, terrorism fears and the insecurity in Somalia.

Kenyan troops crossed into Somalia to hunt down Al Shabaab militia after a series of kidnappings targeting tourist havens at the coast of Kenya.

The military operation ignited a series of grenade attacks targeting entertainment spots mostly in Nairobi and Mombasa.

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