Kenya’s final financial recession was in 2002, not 1992 as main TV station claimed
Kenya’s final recession was recorded in 1992.
Supply: Citizen TV web site (October 2020)
Explainer: Kenya’s most up-to-date recession was in 2002, in response to official information.
- In a report on a latest World Financial institution evaluation of Africa’s financial prospects, the Citizen TV web site claimed that Kenya’s final recession was in 1992.
- A recession is outlined as an financial contraction over six months, or two consecutive quarters of the 12 months. Kenya solely began reporting quarterly fluctuations in its economic system within the 12 months 2000.
- In keeping with the nation’s statistics bureau, Kenya’s most up-to-date recession was in 2002, when GDP fell in each the second and third quarters.
Kenya was considered one of a clutch of African nations whose 2020 financial progress might “stay constructive” even because it slowed considerably, the World Financial institution stated in its biannual evaluation of the continent’s prospects.
This was as a result of their economies had been “extra diversified” and fewer reliant on pure sources, the event lender stated in its October 2020 version of Africa Pulse.
Citizen TV, Kenya’s largest station by viewership, reported on the forecasts in an internet site story headlined “Kenya tipped to flee recession on financial variety”.
It famous: “Kenya’s final recession was recorded in 1992.” Is that this correct?
Defining a recession
When Africa Test requested the station for the supply of its declare, Citizen TV directed us to a World Financial institution chart plotting modifications in Kenya’s gross home product, or GDP, since 1961. GDP measures the scale of a rustic’s economic system. It’s the market worth of all items and companies produced in a given interval, normally a 12 months.
The financial institution’s information exhibits that in 1992, GDP contracted by -0.8%. However the chart doesn’t not give GDP figures for every quarter – three months – of the 12 months. Africa Test has beforehand seemed into the definition of a recession and most specialists we spoke to agreed it was two or extra consecutive quarters of unfavorable progress.
The Kenya Nationwide Bureau of Statistics (KNBS) additionally defines a recession as “two consecutive quarters” of unfavorable GDP progress, Benjamin Muchiri, the bureau’s senior supervisor of nationwide accounts, advised Africa Test.
Development or contraction?
Kwame Owino, chief govt of the Institute of Financial Affairs, a Kenyan suppose tank, stated the very best information on historic financial progress could be within the statistics bureau’s annual financial surveys.
In keeping with the bureau’s 1993 financial survey, Kenya’s economic system grew by 0.4% in 1992 – higher than the World Financial institution’s -08% contraction. However the survey additionally doesn’t break this progress down by quarters.
Muchiri defined why. “The earliest quarterly GDP accessible for Kenya is round 2000 and due to this fact we can not inform from KNBS quarterly statistics if there have been any two consecutive quarterly GDP contractions in 1992,” he stated.
“Nonetheless, the 12 months’s actual GDP progress price was 0.4%, elevating the chance that there have been contractions in a couple of quarter.” However extra analysis could be required to determine if this was certainly the case, he stated.
Recession in 2002 – by all measures
Annual KNBS information exhibits that since 1990, Kenya’s economic system has contracted in just one 12 months – in 2000, when it shrank by -0.3%. In 2002 this was revised to -0.2%. (Observe: GDP figures are routinely restated as new financial information turns into accessible.)
However the bureau’s quarterly information, from 2000 on, reveals that Kenya final recorded a recession in 2002. “We had two consecutive contractions in 2002, of -1.2% within the second quarter and -2.5% for the third quarter,” Muchiri stated.
This information seems within the bureau’s first quarterly GDP report for 2007. However the contractions had been for GDP at market costs. When inflation is taken under consideration, giving actual GDP, the contractions had been -1.7% and -2% respectively.
As a result of each seasonally adjusted and non-adjusted figures had been “exhibiting a recession, there is no such thing as a contradiction”, Muchiri advised Africa Test.
Whereas now we have not seen information that proves or disproves that Kenya’s final recession was in 1992, official information does present there was one 10 years later. We due to this fact price Citizen TV’s declare as incorrect.
Conclusion: Official information exhibits an financial recession in 2002 – 10 years later than Citizen TV claimed
Reporting on a World Financial institution financial forecast for Africa, Kenya’s largest TV station claimed on its web site that the nation final posted a recession, or two consecutive quarters of unfavorable progress, in 1992.
Whereas a recession could or could not have been recorded in 1992, the nation’s nationwide information company advised Africa Test it didn’t have quarterly information for the years earlier than 2000.
Its earliest accessible official quarterly information exhibits Kenya’s most up-to-date recession was in 2002.
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