(NAIROBI, KENYA) – Kenya’s economy grew 5.1% in the second quarter to June, the Kenya National Bureau of Statistics (KNBS) said, shrugging off the Iran war and below average rainfall.
The growth was faster than the 4.9% recorded in the same quarter last year despite high oil prices resulting from the Iran war and reduced rainfall that slowed farming, Kenya’s largest sector and employer.
It was mainly supported by strong activity in sectors including transportation and storage, accommodation and food services.
Analysts expected commodity shortages, energy price hikes and supply chain disruptions following US and Israeli strikes on the Islamic republic from 28th February to scar the global economy.
“The second quarter of 2026 was characterized by disruptions and uncertainty in the global energy market and the early cessation of the long rains,” KNBS wrote in the report.
Growth in GDP, a measure of all economic activities by the government, companies and individuals, should ideally translate to increased earnings and more jobs.
The transportation and storage sector grew by 4.4% compared with 3.3% in the second quarter of 2025.
“The sector’s performance was supported by increased activity across land, rail, and water transport,” the report states.
Other sectors that recorded notable growth included electricity, information and communication technologies, financial services and construction.
The improvement came against a backdrop of rising living costs, with inflation climbing to 6.23% from 3.89% a year earlier, largely driven by higher prices of food and transport.
The KNBS numbers show the economy maintained its growth momentum despite the energy price shock and weather related challenges.
The average retail price of light diesel rose by 32% to KES 217.8 ($1.69) per litre from KES 165.1 ($1.28) in the corresponding quarter of 2025, reflecting the impact of higher global energy prices because of unresolved conflicts in the Middle East.
This was after average crude oil prices, which drive the cost of refined petroleum imports into Kenya, increased to $104.45 (KES 13,558) per barrel from $67.44 (KES 8,754).
Higher fuel prices feed into transport and distribution expenses, while weaker agricultural growth put pressure on food supplies, squeezing household purchasing power and raising operating expenses for businesses.
The construction sector, which is witnessing increased activity in road projects and State backed affordable housing, expanded at a slower pace of 6% compared with 7.3% in a similar quarter of 2025.
This is despite cement consumption growing 11.1% to 2.69 million tonnes from 2.42 million tonnes, while galvanised sheets and steel bars and rods increased by 19.7% and 5.0%, to 92,424.0 tonnes and 138,365 tonnes, respectively.
The KNBS report shows services fared better, with information and communication expanding 7.2%, financial and insurance activities by 6.1%, while electricity and water supply grew by 7.7%.
Accommodation and food services grew by 7.4%, although this was slower than the 12.8% recorded in the same period last year.
The performance of these sectors helped lift overall economic growth despite weaker conditions in parts of agriculture, which remains a key source of income, jobs and food supplies.
Growth in the agriculture, forestry and fishing sector slowed to 3.5% in the second quarter from 4.0% a year earlier, partly because of unfavourable weather conditions that affected crop production.
“The early cessation of the March to May long rains in May 2026, particularly during the critical stages of crop development, resulted in the downward revisions of expected crop production,” the KNBS researchers wrote in the report.
Growth in the sector, which accounts for more than a fifth of GDP, was supported by higher production of some crops. Tea posted an 11.1% jump in output to 162,600 tonnes from 146,300 tonnes, while coffee exports rose by 10% to 22,046.4 tonnes.
The mixed performance in agriculture raises concerns about the supply of food and the cost of living, because food cost pressures are among the main drivers of inflation, accounting for about a third of the consumer basket.
The data shows activity in manufacturing also improved, growing at a faster rate of 2.2% from 1.3% in the second quarter of 2025. The relatively modest expansion suggests an improvement in industrial activity.