PHOTO | DENISH OCHIENG Tourists in Baringo.
NATION MEDIA GROUP
Slow recovery in tourism depressed the overall economy in the second quarter of 2013.
Data
released by the Kenya National Bureau of Statistics indicates that the
hotels and restaurants contracted 11.4 per cent in the second quarter,
against a 2.9 per cent growth over similar period in 2012.
“The
economic slowdown experienced in the first quarter of 2013 spilled over
into the second quarter…the low bookings were mainly linked to
uncertainties over the country’s general elections held in March this
year,” wrote the bureau.
The slowdown depressed the
overall economic growth to 4.3 per cent from the 4.4 per cent growth
reported in a similar period in 2012.
This is despite continued positive performance for the rest of the economy.
Financial services recovered to double-digit growth while agriculture almost doubled its pace.
“It
makes sense that tourism would recover more slowly than other segments
of the economy because people usually make their bookings months in
advance,” said Nairobi economist, Mr Robert Shaw.
Agriculture
posted five per cent growth compared to two per cent growth last year,
while the electricity and water sector recorded 12 per cent growth.
POLL JITTERS
Manufacturing grew 4.3 per cent boosted by performance in the non-food category.
Financial
services recovered quickly from the poll jitters to grow 10.9 per cent
in the three months, in comparison to 5.6 per cent growth reported in a
similar period in 2012.
“In early 2013, investors
adopted a wait-and-see approach. This would explain the heightened
financial activity once people realised that there would be no outbreak
of violence,” said Shaw.
In the days following the March 4 election, the local currency posted strong performance and the stock market rose to a four-and-half-year high.
In the days following the March 4 election, the local currency posted strong performance and the stock market rose to a four-and-half-year high.
The bureau statistical
brief also notes that the gap between the value of Kenya’s import and
exports widened by 50.6 per cent to Sh95.35 billion.
Experts
are concerned that this widening gap in the current account deficit
could put pressure on the shilling and leave the economy exposed to
shocks.
“In situations like this, where there a major
disconnect between the imports and exports, the economy becomes more
vulnerable to shock,” said economist, Mr Gitau Githongo.
The post-election jitters have now been compounded by a terror attack in Nairobi last month.
The post-election jitters have now been compounded by a terror attack in Nairobi last month.
Although
industry players say that they are yet to experience the negative
implications of the Westgate hostage crisis, credit rating agency
Moody’s has said that the terror attack will significantly affect
tourism.
SOURCE: DAILY NATIONAL
SOURCE: DAILY NATIONAL
