Market News

(Bloomberg) -- Kenya’s economy grew 5% in first quarter as good weather powered agricultural output in the East African nation.

The pace of expansion in the three months through March was slightly slower than the 5.1% recorded in the fourth quarter of 2023, as mining output contracted 14.8%, according to data released on Wednesday.

Farming, the nation’s economic mainstay, grew 6.1%, compared with 6.2% in the three months through December. Kenya is the world’s biggest exporter of black tea; production of the leaves surged 43% in the first quarter.

“The performance of the sector was attributed to favorable weather conditions as well as government interventions that led to enhanced production,” the Kenya National Bureau of Statistics said in an emailed statement. “However, the sector’s performance was somewhat curtailed by decline in exports of coffee, fruit and cut flowers.”

Heavy rains that killed almost 300 people in the second quarter of this year and destroyed swathes of croplands will likely dent growth. The National Treasury projects the economy will expand 5.5% in 2024, the central bank sees 5.7% and the International Monetary Fund expects 5%. Those estimates compare with 5.6% growth in 2023.

The government’s plan to cut spending after scrapping new tax measures aimed at raising about $2.3 billion for budget expenditure may also further hurt growth, given public spending is a key driver of output.