Despite a highly volatile shilling during the year, and a persistent rise in commodity prices, Kenya’s economic growth rose in the third quarter of 2015.
The KNBS report cites agriculture, construction, financial and insurance as the main sectors driving this growth in 2015. These sectors were in turn able to thrive due to strong macro-economic indicators. “Stable macro-economic indicators such as low inflation and interest rates and a strong shilling,” notes the KNBS report.
In the third quarter of 2015, inflation (the persistent rise of commodity prices) was 6.14 per cent, down from 7.54 per cent during a similar period in 2014, a decline of 1.4 percentage points.
While in June 2015 it was 10 per cent, a month later it was raised by 1.5 per cent to rein in commercial banks who were charging their customers high interest rates on their loans.
Conversely, during the third quarter of 2015, the Kenyan shilling remained strong against other African currencies such as the South African rand as well as Tanzanian and Ugandan shillings.
This is overall good news for the Kenyan economy as historically the country gears up for a general election in 2017, as the KNBS report implies that the economic sectors are an indicator of good governance.