Kenya's Economic Growth Hits Covid-Era Low

Kenya's economic growth hit its lowest level since the Covid-19 pandemic in the third quarter of 2024, with the construction sector recording its worst performance since the Moi era, according to the latest economic data.

The nation's economy expanded by 4.0% in Q3 2024, down from 5.0% in the same period last year, marking a significant slowdown in economic activity. The construction sector, traditionally a key driver of growth, contracted by 4.7%, reflecting broader challenges in the real estate and infrastructure development segments.

Multiple factors contributed to this economic deceleration. The agricultural sector, a cornerstone of Kenya's economy, struggled due to unfavorable weather conditions, while high living costs and rising interest rates further dampened economic activity. These challenges have particularly affected household spending and business investment.

However, it's not all doom and gloom. The financial and insurance sectors showed resilience, maintaining positive growth trajectories despite the overall economic slowdown. This suggests that certain segments of the economy continue to demonstrate strength even as others face headwinds.

The current growth rate echoes the challenging period during the Covid-19 pandemic, raising concerns about the economy's near-term outlook. Economists are closely monitoring these developments, particularly as the construction sector's unprecedented contraction signals deeper structural challenges in the economy.

As Kenya navigates these economic headwinds, the focus turns to policy measures that could help stimulate growth and support struggling sectors while maintaining the momentum in areas showing positive performance.