Kenya’s growth momentum eases to 5.1 per cent in Q2

Kenya’s growth momentum eases to 5.1 per cent in Q2 - An aerial view of Nairobi City. (Photo: Flickr)

The slower economic expansion coincided with rising living costs, with inflation climbing to 6.23 per cent from 3.89 per cent a year earlier.

Kenya’s economic growth momentum slowed in the second quarter of 2026, with the economy expanding by 5.1 per cent from 5.3 per cent in the first quarter.

The slowdown came amid rising global oil prices and unfavourable weather conditions that weighed on economic activity.

However, the latest data from the Kenya National Bureau of Statistics (KNBS) shows that growth accelerated from 4.9 per cent in the second quarter of 2025, pointing to stronger economic performance than a year earlier despite mounting cost pressures and disruptions to agricultural production.

Average crude oil prices surged to $104.45 (Sh13,567) per barrel from $67.44 (Sh8,759) in the corresponding quarter last year, raising the risk of higher transport and production costs.

The early end of the March-May long rains in May also disrupted crop development, forcing downward revisions to expected harvests.

“The second quarter of 2026 was characterised by disruptions and uncertainty in the global energy market and the early cessation of the long rains,” KNBS said in its quarterly GDP report.

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Agriculture, forestry and fishing grew by 3.5 per cent, down from 4 per cent a year earlier, as unfavourable weather conditions affected crop production.

However, tea output rose by 11.1 per cent to 162,600 tonnes, while coffee exports increased by 10 per cent to 22,046 tonnes, cushioning the sector against the weather-related setbacks.

Transport and storage provided stronger support to the economy, expanding by 4.4 per cent compared with 3.3 per cent in the second quarter of 2025.

Cargo transported through the Standard Gauge Railway increased by 17.7 per cent to 2.05 million tonnes, while throughput at the Port of Mombasa rose by 5 per cent to 11.26 million tonnes.

Electricity and water supply recorded growth of 7.7 per cent, up from 6.5 per cent a year earlier, supported by increased renewable power generation.

Information and communication expanded by 7.2 per cent, while financial and insurance activities grew by 6.1 per cent.

Accommodation and food services grew by 7.4 per cent, although this was slower than the 12.8 per cent expansion recorded in the same quarter last year, pointing to a loss of momentum in the hospitality sector.

Manufacturing showed an improvement, with growth accelerating to 2.2 per cent from 1.3 per cent a year earlier.

Cement production rose by 10.5 per cent to 2.73 million tonnes, while sugar output nearly doubled to 211,800 tonnes.

Construction, however, expanded by six per cent, down from 7.3 per cent in the corresponding quarter last year, despite an 11.1 per cent increase in cement consumption.

The slower economic expansion coincided with rising living costs, with inflation climbing to 6.23 per cent from 3.89 per cent a year earlier.

Average retail diesel prices increased by 32 per cent to Sh217.80 per litre, adding to pressure on households and businesses.