Covid-19 pandemic slows first quarter of 2020 growth
Lewis Njoka @LewisNjoka
Slowed economic activity due to the Covid-19 shocks, Kenya’s economic growth slowed down marginally in the first quarter of 2020, despite relatively diverse commodities and trading partners.
Growth slowed to 4.9 per cent compared to 5.5 per cent a year earlier as the pandemic hit the economy causing uncertainties in key areas, says Kenya National Bureau of Statistics (KNBS) in a new report.
In what is the lowest gross domestic product (GDP) growth ever posted in Q1 since 2015, and the only one below five per cent over the time, Kenya was however somewhat spared the brunt of the Covid-19 pandemic.
“Economic performance in most sectors slowed in the first quarter of 2020 compared to the corresponding quarter of 2019.
Real GDP grew by 4.9 per cent during the review period compared to 5.5 per cent growth in the first quarter of 2019,” said the report.
Churchill Ogutu, the head of research at Genghis Capital says reduced economic growth during the period was expected saying there was a contraction in demand.
“I expected a slowdown in the first quarter due to the locust invasion. Even looking at the Purchasing Managers Index (PMI) data in the first quarter, it was pointing towards a decline because it was below the neutral 50 mark meaning the demand in the economy was somehow muted,” he said.
The report says accommodation and food service activities contracted by 9.3 per cent during the period under review compared to 11 per cent growth in the first quarter of 2019 due to travel cancellations and hotel closures brought forth by the Covid-19 pandemic.
“Measures imposed to mitigate the spread of Covid-19 resulted to a decline in number of international visitor arrivals through the two major airports from 364,744 in the first quarter of 2019 to 294,053 in the review period,” KNBS says.
Similarly, manufacturing, construction, electricity and water sectors, all registered reduced growth rate during the period compared to a similar period last year.