Kenya's Q1 economic growth slowed compared to the previous year as manufacturing and construction slumped but agriculture and tourism rebounded to help keep it on track with the government's full year growth forecast.

Kenya's GDP expanded by 5.3% in the first quarter of 2023, compared to a 6.2% growth in the corresponding quarter of 2022, the statistics office said on Tuesday.

The Q1 growth was largely affected by a decline in manufacturing and construction, but the agricultural sector experienced a rebound, significantly shoring up growth, the Kenya National Bureau of Statistics said in a statement.

The agriculture sector expanded by 5.8% in the first quarter of 2023 compared to a contraction of 1.7% in the first quarter of 2022, due to favourable weather conditions.

The growth in tourism - accommodation and food service sector - nearly doubled.

The country's agricultural sector contributes significantly to economic growth and rural employment, with tea, coffee, cut flowers as its main exports.

Tourism is a leading foreign exchange earner, with visitors flocking to Kenya's beaches and game reserves.

"Strong Kenya Q1 GDP... likely reflects better rains (agriculture) and continued recovery in tourism," Razia Khan, Standard Chartered Bank's Chief Economist Africa Middle East said on Twitter.

The statistics office said Kenya's export earnings increased by 9.4% to 233.0 billion Kenyan shillings ($1.7 billion) - a much faster growth compared to a 2.1% increase in the imports 536.6 billion Kenyan shillings ($3.8 billion). 

Improved earnings from tea, iron and steel, titanium ores and concentrates boosted the growth in exports, it said. Decelerated growth in imports was attributed to the decline in imports of industrial machinery, iron and steel, it added.

The finance minister Njuguna Ndung'u said in his budget speech on June 15 that economic growth is expected to expand to 5.5% this year, up from 4.8% in 2022, affected by a severe drought and global shocks that curbed economic activity.

Opposition politicians say plans by the government to double the tax on petroleum products to 16%, rising costs of basic commodities such maize flour and cooking oil and restrained revenue collection could affect economic expansion. 

(Editing by Seban Scaria seban.scaria@lseg.com)