The Economic Survey report 2015 officially launched

The Government has officially launched the Economic Survey report 2015 published by the Kenya National Bureau of Statistics (KNBS). The report was presented by Anne Waiguru, OGW Cabinet Secretary Ministry of Devolution and Planning.

According to the report, the agricultural sector in 2014 recorded a growth of 3.5 per cent compared to a growth of 5.2 per cent in 2013. The sector recorded mixed performance mainly attributable to erratic rains with some regions experiencing depressed rainfall. The value of marketed agricultural production at current prices declined marginally from Kshs 334.8 billion in 2013 to 333.2 billion in 2014. 

Key Crops Production
Commodity (‘000 Tonnes) 2013 2014 % change
Tea 432.4 445.1 2.9
Coffee 39.8 49.5 24.4
Fresh horticultural produce 213.8 220.2 3.0

 

Domestic Economy

The country’s Gross Domestic Product (GDP) is estimated to have expanded by 5.3 per cent in 2014, compared to a growth of 5.7 per cent in 2013. The Performance was supported by increased government and private final consumption, low oil prices, increase in exports of goods and services and stability of the Kenya Shilling against major currencies (despite slight depreciation against the US dollar).  The Agriculture, Forestry & Fishing sector contribution to GDP growth was 14.5 compared to 20.8 in 2013.    

Inflation

Annual average inflation increased from 5.7 per cent in 2013 to 6.9 per cent in 2014. The modest increase in the rate of inflation was attributed to increases in the cost of several food and non-food items which outweighed notable falls in the cost of electricity and petroleum products including petrol, diesel and kerosene.

In regard to International Trade key indicators showed that in 2014, Kenya’s merchandise trade deficit continued to widen due to a high import bill.  Imports rose by 14.5 per cent in 2014 to KSh 1,618.3 billion while total exports grew by 6.9 per cent to KSh 537.2 billion during the same period. The trade balance worsened by 18.7 per cent from a deficit of KSh 911.0 billion in 2013 to a deficit of KSh 1,081.1 billion in 2014. Tea, horticulture, articles of apparels and clothing accessories; and coffee were the leading export earners in 2014 collectively accounting for 52.1 per cent of the total export earnings.

In the International scene the world economy is estimated to have grown by 3.3 per cent in 2014 similar to the revised growth of 3.3 per cent in 2013. This low growth was due to persistent weak import demand from advanced economies, slower expansion of global supply chains and shifts in demand towards less import intensive products.

Economic Outlook for 2015

Globally, most developed and developing economies are projected to experience improved growths in 2015. World trade is expected to grow by 4.5 per cent compared to a growth of 3.0 per cent during the year.  Oil prices are projected to remain subdued throughout the year due to possibilities of sustained oversupply as Iran and Libya add to the current output after improved political environment. Based on these projections, the global economic prospects for 2015 is therefore bright with world real GDP projected to grow at 3.5 per cent in 2015 subject to continued recovery from the global financial crisis. This is expected to impact positively on Kenya’s economic growth.

Locally, the country experienced depressed rainfall during first quarter of 2015 while weather forecast points to a possibility of insufficient long rains in parts of the country. Performance of the agriculture sector is likely to therefore remain close to the 2014 level due to its over-reliance on rain fed water and on average, electricity prices might fall slightly in 2015 due to increased share of geothermal electricity generation.

Waiguru said that the to spur growth in the agriculture sector, the Government will endeavor to step up efforts aimed at increasing the adoption of commercial agriculture, reduce the cost of farm inputs to ensure affordability, increase the level of mechanization in farming practices and fast track the construction of fertilizer factory to reduce the price of fertilizer and therefore encourage its use. They will also promote good agricultural husbandry especially with regard to agricultural exports,  reduce rain dependency by expanding land under irrigation,  and fast track the ongoing efforts aimed at reducing the cost of production

She added that the enactment of Special Economic Zones (SEZ) bill will be fast tracked and to facilitate the establishment of SEZ’s and industrial parks. To promote exports and improve balance of trade the Government should provide tax and other incentives to exporters,   facilitate bilateral arrangements with regional trading economic blocks and improve the competitiveness of Kenyan products.

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