Kenya's economy is on the fast lane to recovery with performance indicators for the second quarter showing an improved state of affairs compared to the first quarter.

Data released by the Kenya National Bureau of Statistics shows that the economy expanded by 3.2 per cent, reversing a contraction of one per cent recorded in the first quarter.

The negative one per cent growth rate is a revised figure of the negative 1.3 per cent figure released in June 2008, in what the data agency says was necessitated by the availability of new information.

Experts project that the economy will maintain the current pace to record an annualised growth rate of at least five per cent by December 2008 with even better prospects for 2009.

The International Monetary Fund estimates a growth rate of at least 7.2 per cent in 2009.

Still reeling

At 3.2 per cent, the growth rate is however almost a third of the rate recorded in the second quarter of 2007 (8.9 per cent) indicating the country is still reeling from the effects of the post-poll violence.

"The slower growth is a reflection of the spillover effects in certain sectors of the post-election violence," the bureau says in its quarterly report.

A positive note is the fact that the economic growth improvement, from negative one per cent (revised) in the first quarter to 3.2 per cent, has only been exceeded once since 2001.

Adjusted for the post-violence effects and its spillover, the country recorded 6.8 per cent growth in the second quarter.

"This indicates an impressive improvement of the economy in the second quarter of 2008 compared to a decline of 3 per cent in the first quarter of 2008," says the agency.

The bureau, however, warns against relying on the seasonally adjusted growth rate saying it "is somewhat volatile."

Driving the recovery are manufacturing, electricity and water, wholesale and retail trade, and the fishing sectors.

Hotels and restaurants, and transport and communication sectors are yet to record substantial recovery.