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Wednesday, October 21, 2020

Kenyan economy shrinks to negative 5.7 for first time since 2008

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Kenyan Economy 2020: The economy is doing badly. Very badly. It contracted for the first time since the third quarter of 2008 as second quarter growth dropped to a negative 5.7 per cent from a positive 5.3 per cent in 2019.

In a delayed relay of the economic performance between April and June this year, the Kenya National Bureau of Statistics (KNBS) attributed the dismal out turn of activity to COVID-19 restrictions which took effect for an extended period of the second quarter.

Gross domestic product fell 5.7 per cent, compared with growth of 4.9 per cent in the three months through March and expansion of 5.3 per cent in the same period a year earlier, the Kenya National Bureau of Statistics said Thursday on its website.

“The poor performance in the quarter was characterized by substantial contractions in accommodation and food services, education, taxes on products, and transportation and storage, which consequently occasioned the significant downturn,” the KNBS said.

This contraction came a the government loaded more debts on the already weak economy.

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The Economy of Kenya is a market-based economy with a liberalized external trade system and a few state enterprises. Major industries include agriculture, forestry, fishing, mining, manufacturing, energy, tourism and financial services.

Leading indicators for the three months through September point to a strong recovery in activity and the central bank sees GDP growth of 3.1 per cent for the year, according to Governor Patrick Njoroge. The International Monetary Fund revised its GDP forecast this month to growth of 1 per cent from an earlier projection of a 0.3 per cent contraction for the year. Kenyan Economy 2020.

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