The Kenya National Bureau of Statistics (KNBS) has released the First Quarter 2023 GDP Report highlighting that:

Kenya’s overall economy grew by 5.3% in Q1:2023, a 0.9%  decline from the 6.2% growth recorded in a similar period last year. On a QoQ basis, the performance was however an improvement from the 3.7% growth recorded in Q4:2022, signalling the end of an electioneering period:

Source: Kenya National Bureau of Statistics

Similarly, the Real Estate sector recorded a slight decline in its growth to 5.2% in Q1:2023, from the 6.0% recorded in Q1:2022. This is despite being the fourth largest contributor to  GDP. The performance was mainly on the back of a decline in transaction and expansion activities in sub sectors such as the retail and commercial office. The sector’s performance however improved on a QoQ basis from the 2.9% growth recorded in Q4:2022, having come from a period of uncertainties emanating from the 2022 general elections:

Source: Kenya National Bureau of Statistics

Notably, the construction sector recorded the lowest growth rate ever in the last five years. The sector’s growth contracted to 3.1%, from the 6.0% realized in Q1:2022. This was mainly driven by a decline in construction development activities particularly in the infrastructure sub sector, owing to a change in government regime. This saw a shifted focus in construction activities. Moreover, the decline was also fuelled by supply chain disruptions, coupled with persistent inflationary pressures which has seen the overall cost  of construction rising since 2019:

Source: Kenya National Bureau Of Statistics

With the new Finance Act in place (Subject to Court Petition Decision), Estate Intel expects Kenya’s inflation rate to persist for the rest of 2023. This in turn is expected to weigh down optimum activities particularly in the construction industry, as well as the general Real Estate sector owing to increased operational costs. 

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