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UPDATE 1-Rebound in tourism helps Kenyan economy grow faster in Q2
September 30, 2016 / 12:07 PM / in a year

UPDATE 1-Rebound in tourism helps Kenyan economy grow faster in Q2

(Adds details on drivers of growth)

NAIROBI, Sept 30 (Reuters) - Kenya’s economy grew faster in the second quarter of this year compared with the same period in 2015, lifted by expansion in agriculture and a strong recovery in tourism, the statistics office said on Friday.

The Kenya National Bureau of Statistics (KNBS) said the economy expanded by 6.2 percent year-on-year in the second quarter compared with 5.9 percent in the same period in 2015.

It said agriculture grew 5.5 percent versus 4 percent in the year-ago period, while accommodation and food services - which includes tourism - rose 15.3 percent compared with a contraction of 5 percent.

“The remarkable growth was on account of a considerable boost from conference tourism as well as an improved security situation. The recovery has also been enhanced by rigorous marketing initiatives that have been implemented over time,” KNBS said.

Tourism, along with tea, horticulture and remittances, are Kenya’s leading sources of foreign exchange.

In 2015, East Africa’s biggest economy struggled with a number of challenges including attacks blamed on Somalia’s al Shabaab militants that scared away tourists and eroded foreign exchange earnings in the sector.

Growth in the transport sector rose to 8.8 percent in the quarter under review from 6.8 percent in the same quarter of 2015, KNBS said.

The Finance Ministry forecasts the economy will grow 6 percent in calendar 2016 and by 7 percent a year in the medium term, compared with 5.6 percent last year.

The current account deficit contracted by 6 percent to 141.92 billion shillings ($1.40 billion), helped by low international oil prices and falling machinery imports, the statistics office said. ($1 = 101.1000 Kenyan shillings) (Reporting by George Obulutsa; Editing by Mark Trevelyan)

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