Growth accelerated during the first quarter to +5.7% y/y from +5.3% y/y in Q4 2017. The recovery was well expected following positive signs in the manufacturing sector activity since November 2017. After stagnating from Q2 to Q4 2017, manufacturing output grew by +2.3% y/y in Q1 2018. This bodes well for an overall growth acceleration in 2018, a positive momentum favored by the end of the political dispute that arose after the presidential election. More floods also drove the cyclicality of Kenya’s growth, as agricultural output grew by +5.2% y/y in Q1, the strongest since Q2 2016. Moreover, the Central Bank cut its policy rate by -75bps to 9.25% since the beginning of the calendar year, banking on low inflation (4.6% y/y in June 2018). The overall improvement of the growth components should drive full-year growth to +6.5% in 2018 from +4.9% in 2017.
