The government, through the Ministry of Devolution and Planning, unveiled a report that indicates that the country’s domestic economy grew by 4.7 percent last year compared to 4.6 percent the previous year. This represents a steady progress that is on course towards the achievement of double-digit growth by the year 2017.
At the launch of the 2014 Economic Survey Report, Ministry of Devolution and Planning Cabinet Secretary, Ms. Anne Waiguru,said: “Growth in Sub-Saharan Africa and the East African Community (EAC) remained relatively robust with real GDP estimated to have expanded by 5.0 and 6.1 percent, respectively in 2013. This was due to an increase in trade and investment with emerging market economies.”
The economy however recorded lower growth last year than projected as a result of several factors that include:
- Depressed performance of the rains that affected the agriculture sector;
- Decline in exports resulting to worsening of trade balance;
- Comparably higher interest rates, crowding out private sector investment;
- Reduced spending by government agencies,
- During the transition and general Insecurity concerns in the country.
Key sectors recorded mixed results with majority sustaining positive figures over that period. Agriculture, and Wholesale and Retail Trade are some of the sectors that recorded minimal decline while the Manufacturing, Construction and Transport sectors registered steady growth.
Over the same period, annual average inflation decreased from 9.4 percent in 2012 to 5.7 percent last year; an occurrence that was largely attributed to improved supply of basic foodstuffs and stable domestic prices of petroleum products.
Conversely, Total exports declined by 3.0 percent while total imports increased by 2.8 percent.
Similarly, the country’s overall balance of payments position declined from a surplus of KSh 123.0 billion in 2012 to a surplus of KSh 74.0 billion in 2013.
This was due to the current account deficit worsening by 14.7 percent as a result of earnings from merchandise exports dropping by 4.1 percent to KSh 501.2 billion, and tourism earnings declining by 2.1 percent.
In the year 2014, the Kenyan economy is set to significantly grow as a result of projected expansion of world trade volume at 4.8 percent in 2014 supported by an increase in global commodity demand that may see Kenya’s exports register some growth during the year.
CS Anne Waiguru said: “The macroeconomic stability witnessed in 2013 continued into the first quarter of 2014 and is likely to be maintained to the rest of the year, while operationalization of the development budget in the counties is expected to spur further economic growth.”