INCREMENTAL CAPITAL-OUTPUT RATIO

AS MEASURE OF PRODUCTIVITY OF
INVESTMENT: THEORY AND A KENYAN
EXAMPLE

by
John Thinguri Mukui

Report Prepared for USAID, Nairobi, Kenya

5 October 1990

STATEMENT OF WORK
PURPOSE AND OBJECTIVES
The purpose of the consultancy is to assist USAID/Kenya to develop a database for use in
monitoring and evaluation of program impact at the goal, sub-goal and purpose levels of the
Missions development assistance program. The objectives of this consultancy are to review,
interpret and analyze data, as well as develop a database on income distribution, consumer
price index (CPI), agricultural productivity, and the level and productivity of private
investment. Much of this program performance information will also be useful to the
Government of Kenya and private sector groups.
In order to assess the goal of sustained broad-based economic growth and sub-goals of
increased production and incomes, indicators of income have an important role to play.
While major indicators of income e.g. Gross Domestic Product (GDP), Gross National Product
(GNP), GDP per capita etc are easily available, information on income distribution is scarce
and not easily accessible. Yet measures of income distribution are necessary in assessing the
broad-based characteristics of economic growth.
USAID/Kenya is interested in real growth. An important component of real growth is the rate
of inflation. A number of observers are of the opinion that the rate of inflation in Kenya is
higher than the official estimates. An understanding of what the rate of inflation is in Kenya
will shed light on real growth of the Kenyan economy and on price stability.
In order to measure purpose-level program impact and for decision-making, USAID/Kenya
would like to get a good handle on indicators of productivity of investment (especially private
investment), capital and labor, as well as productivity of agriculture (especially smallholder
agricultural productivity). Productivity is one the major determinants of the standard of
living since increases in productivity may result in higher real income and promote price
stability. The measurement of productivity is also an important element in the evaluation of
the relative efficiency of factor utilization.
SCOPE OF WORK
The following information and analysis shall be provided under this consultancy:
i

Review, interpret, and analyze data on income distribution from published and
unpublished sources. Develop a database on income distribution including the
following indicators of income distribution: Gini coefficients, total income
distribution, land Gini coefficients, regional income distribution, and factorial income
distribution. Discuss the status of the Social Dimensions of Adjustment (SDA) project.

ii

Analyze the Governments computed consumer price index (CPI). Provide revised CPI
based on appropriate commodity basket, weights and income groups. Based on this
alternative CPI, develop a series of CPI for the period 1980-1989.

iii

Identify and compute appropriate indicators for productivity of investment (especially

private investment), capital and labor. Analyze trends in productivity during the
period 1975-1989.
iv

Identify and compute appropriate indicators for agricultural productivity (with special
emphasis on smallholder productivity). Develop a series of trends in agricultural
productivity during the period 1975-1989.

Describe and discuss the difficulties in assembling the various data, as well as the
adequacy of the data. Discuss in depth the reliability and validity of various data.
Discuss the strengths and drawbacks of various indicators.
REPORTS AND DELIVERABLES

The consultant shall produce a comprehensive database for the USAID/Kenya Mission. The
report shall include a series of tables for all indictors identified above. It shall also include an
analysis of these data, an assessment of their reliability and validity, and identification of
underlying assumptions, as well as recommendations for collecting and updating the
information. The consultant should discuss the usefulness of each factor of production by
sector (labor, land and capital), focusing mainly on agriculture and industry, in an attempt to
justify the choice of sector-specific measures of productivity.
SPECIFIC TERMS OF REFERENCE
1. INDICATORS OF AGRICULTURAL PRODUCTIVITY
i

Identify and compute appropriate indicators for agricultural productivity (with special
emphasis on smallholder productivity). Develop a series of trends in agricultural
productivity during 1975-1989.

ii

Describe and discuss the difficulties in assembling the various sources of data, as well
as the adequacy of the data. Discuss in depth the reliability and validity of various data.
Discuss the strengths and drawbacks of various indicators.

iii

Carry out a detailed analysis of trends in maize productivity increases especially for
smallholders. Use the physical indicator of yield per hectare as measure of
productivity.

iv

Undertake a detailed analysis of trends in sorghum/millet productivity increases. Use

the physical indicator of yield per hectare as measure of productivity.

Carry out a detailed analysis of trends in wheat productivity increases. Discuss both
smallholder and large-scale farms wheat productivity. Use the physical indicator of
yield per hectare as measure of productivity.

vi

Assess the productivity gap, that is, yield gaps in the above basic food grains.

vii.

Analyze factors underlying yield gaps.

ii

2. MEASURING PRODUCTIVITY OF INVESTMENT AND LEVELS OF INVESTMENT

Objective
The objective of this consultancy is to investigate the productivity of investment in Kenya for
the economy as a whole and for specific sectors including manufacturing, agriculture and
construction. In addition, the consultancy will include the analysis of government, parastatals
and private sector investment in each sector and the economy as a whole with a view to
defining purely private investment. This will be accomplished by analyzing existing data,
discussions with Government officials, and developing alternative indicators for productivity
of investment including the incremental capital-output ratio.
Background
One of the primary objectives of the USAID Mission in Kenya is to raise the level and
productivity of private investment in order to put the economy on a sustainable broad-based
growth path. Presumably, therefore, increased productivity of private investment, or an
accepted proxy, must be an objective target in the Missions strategy. After some initial
research, it does not appear so easy to provide reliable quantified benchmarks to measure that
objective.
Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth states that
Kenya has required nearly six units of new capital to produce one new unit of output in the
past decade. According to the GOK-published data on the economy as a whole, Kenyas
ICORs compare favorably with those of other countries and Kenyas ICOR has declined over
the past several years. The interpretation of these results is difficult given controls on interest
rates, exchange rates and many prices. In addition, the relative amount of excess capacity
could affect the ICOR if growth in the past five years has come from existing capacity.
Another issue with the productivity of investment is the contribution of Government,
parastatals and the private sector. It would be interesting to analyze each of these actors in
detail. As USAID/Kenya analyzes different program options, it would also be interesting to
look at the productivity of investment in different sectors like manufacturing, horticulture,
and construction.
Our understanding of the economy is not as good as might be. More research is required
before USAID or the Government can rely on the ICOR or other measures of productivity of
investment to make investment policy decisions.
Deliverables under the contract
The completed report will include the following information and analysis:
i

Discussion of different measures of the productivity of investment including the

incremental capital-output ratio (ICOR) and at least two additional alternative
measures.

ii

Discussion of data sources on investment broken down by sector and economic agent

iii

(government, parastatals or private sector) for Kenya.

iii

Calculation of the incremental capital-output ratio and two alternative measures of

productivity of capital for the economy as a whole and for each of the productive
sectors for the period 1970-1988.

iv

Calculation of the ICOR and two additional measures of productivity of capital for
each sector of the economy by economic agent (government, parastatal and private
sector) for the period 1970-1988. This calculation will be dependent on data
availability.

An analysis of the quality of data provided, explaining the results of the ICOR
calculations, trends in the results, anomalies in the calculations, how the results
compare to other African countries, and recommended areas for further research.

vi

Discussion of problems in using ICOR and other measures in calculating productivity

of investment.

vii Discussion of capacity utilization in the Kenya economy and estimates of annual
capacity utilization for the period 1970-1988.
PHASING OF THE WORK
The first study undertaken was on the CPI, followed by preliminary analysis of income
distribution, incremental capital-output ratio, and finally agricultural productivity for
selected food crops.
Due to time constraint based on the contract, the scope of work was scaled down
substantially. For example, the study on the consumer price index no longer required
development of alternative CPI for the period 1980-1989. The study on agricultural
productivity excluded the issue of assessing productivity (yield) gaps for each crop and factors
underlying yield gaps, since yield gaps were considered region-specific based on agricultural
potential.
In the case of productivity of capital investment, the issues excluded were analysis of
contribution of the governmental sector since there was an existing study conducted by the
Long Range Planning Division of the Ministry of Planning and National Development; use of
at least two additional measures of productivity (apart from the capital-output ratio); and
estimates of annual capacity utilization.
The USAID/Kenya Mission decided to support the Central Bureau of Statistics to update the
CPI through financial support and technical assistance, while more sophisticated analysis on
productivity of capital investment was to be undertaken later based on preliminary findings
on the capital-output ratio.

iv

INCREMENTAL CAPITAL OUTPUT RATIO AS MEASURE OF PRODUCTIVITY OF

INVESTMENT: THEORY AND A KENYAN EXAMPLE
EXECUTIVE SUMMARY
i.
The main factors of production are labour and capital. While there are divergent
views on what are the binding constraints on growth, it is necessary to study the trend in
returns on capital as efficiency in capital utilization has implications on growth, the
competitiveness of Kenyas exports, and on the imports required to finance capital
accumulation. One of the popular measures of return on investment at the macro-level is
the capital-output ratio, which measures the relationship between capital and output.
However, since data on capital stock is usually unavailable or unreliable, the more common
measure is the incremental capital-output ratio (ICOR) because it only requires data on
fixed investment and GDP, which is available from the national accounts.
ii.
The Ministry of Planning and National Development (MPND) computes ICORs as
part of the routine macro-modelling work. The MPND uses three-year moving totals in
place of single year values of investment and output. One of the appeals of MPND approach
is the use of depreciation estimates. The MPND uses two sectoral depreciation rates (share
of current income devoted to replacement) of 0.02 or 0.05, based on whether the share of
machinery and other equipment in total sectors capital formation is less or more than 70
percent. Investment, as given in the Statistical Abstract, is in gross terms, while net
investment is gross investment minus depreciation. Our analysis will relate to fixed
investment. It will not cover inventory accumulation, as the latter is not necessarily related
to growth in output, but is also influenced by other factors e.g. import controls and
expectations about trends in exchange rates, interest rates and inflation.
iii.
During the period 1972-76, gross fixed capital formation at constant prices is
generally characterized by a declining trend but grew during 1977-78 due to the coffee
boom, which led to a surge in investment other than in the services sector. The price
increase was not taxed, and coffee farmers converted an estimated 60 percent of the
windfall into savings. The 1979 oil crisis and the 1980 drought reversed the upward trend,
followed by some recovery in 1981, and a further reversal in 1982. In the period 1981-85,
fixed capital formation registered a continuous decline but started picking up after 1986.
iv.
Kenya registered declining trend in GDP growth rates in early 1970s. However, the
1976-77 coffee boom reversed the trend and GDP growth rates rose tremendously. After
1977, GDP growth rates took a declining trend as a result of the 1979 oil price shock and
the 1980 drought. In 1982, GDP growth plunged to 3.4 percent and continued declining to
its lowest level in 1984 when the country experienced a severe drought. Since 1985, the
economy has managed to grow at an annual rate of 5 percent. In the second half of the
1980s, the high GDP growth rates can be attributed to increased utilization of capacity
created in the earlier years as fixed investment at constant prices was lower in 1980s
compared to the late 1970s.
1

v.
We shall not interpret ICORs for producers of Government services due to
conceptual and data problems. In national accounts terminology, GDP accruing to
producers of Government services excludes all enterprise activities of the government
sector e.g. building and construction and forestry; and consumption of fixed capital, other
than an imputed amount in respect of vehicles. What is usually termed as contribution of
public sector to capital formation lumps up both parastatals and Government capital
formation on nongovernment activities. Due care should therefore be taken in computing
ICORs for producers of government services as this is almost identical to the ratio of
investment to increase in the wage bill. However, GDP generated by government
expenditure on nongovernment economic activities is derived in the same way as private
and parastatal sector GDP. In addition, since the implicit GDP and fixed investment
deflators are not identical, we have used constant price GDP and investment data.
vi.
In using the ICOR to determine the trend in return to investment, the length of
period to be considered is important. During the period 1972-89, the range of gross ICOR
for total GDP declines (and ICORs appear more stable) the longer the lag period considered.
A second important factor is the base output. For example, due to slowdown in growth in
1984 due to drought, ICORs using 1984 as base year will show a decline in ICORs, and thus
give a misleading indication of increase in the productivity of investment. ICORs for the
whole economy show a declining trend over time and are lower and more stable in the
1980s than in 1970s. The net ICOR, with three-year moving average and assuming a
weighted depreciation rate of 0.030427674, declined from 4.98 in 1975 to 2.55 in 1989. The
downward trend may be a result of gradual increase in utilization of productive capacity
built up in the second half of the 1970s following the coffee boom and the breakup of the
East African Community. After 1986, net ICORs (with three-year moving average)
declined, but have stabilized around a value of 2.5. The recent stabilization of ICOR
indicates that this source of growth might be running out of steam, and there is need for
increased capital formation in the economy.
vii.
Some of the sectoral net ICORs (using three-year moving average) exhibit a
declining trend, especially for the major national accounts sectors such as manufacturing,
trade, and other services; while other sectors show considerable fluctuations such as
mining and quarrying, building and construction, and electricity and water. The estimated
values for some sectors are unusually large (positive and negative) for some periods which
in general is a consequence of decline or stagnation in sectoral GDP in the period. For the
agricultural sector, the net ICOR increased to a peak of 2.02 in 1980 due to unfavourable
weather conditions; declined to 0.85 in 1983 due to improvement in weather conditions;
increased in 1984 and 1985 due to drought; but declined again after 1986 as the favourable
weather conditions and structural adjustment began to impact on producers. The ICOR as a
measure of trends in return on capital in the agricultural sector is somewhat deceptive,
mainly because agricultural output is also influenced by other factors including weather,
quality of crop and animal husbandry, agricultural producer prices, and other Government
policies.
viii. For manufacturing sector, the ICORs were high in the mid-1970s probably
reflecting low capacity utilization but fell briefly during the coffee boom of 1976-77 due to
foreign exchange availability. After 1981, net ICOR has shown a declining trend, having
fallen from 3.46 in 1981 to 2.00 in 1989. The observed declined in the ICOR in the 1980s is
2

probably due to increased utilization of idle capacity created in the earlier years. Since
manufacturing output has consistently increased during the period 1972-1989 while
investment has on average declined, the decline in ICORs reflects actual improvements in
efficiency of investment and increased capacity utilization. The annual variations on a
trend are more likely due to fluctuations in availability of imported inputs brought about by
import controls and foreign exchange shortages. The building and construction sector is
characterized by unusually large or negative ICORs, which implies stagnation and are signs
of serious problems in the sector. The estimated net ICORs for the trade, restaurants and
hotels registered a significant downward trend, implying that capacity utilization (e.g.
hotel occupancy) has been improving. The transport, storage and communications sector
exhibited a declining trend in estimated ICORs until 1984, but climbed from 3.8 in 1984 to
7.0 in 1989.
ix.
The data on net ICORs are assumed to measure the impact of flow of capital services
to the flow of output. This is expected to minimize errors of the capital-output ratio as a
stock-flow concept. However, the net ICOR does not completely remove such bias because
(a) it does not take into account variations in capacity utilization, and (b) the difficulties of
arriving at reasonable indicators of depreciation rates. More reliable estimates of
depreciation rates should be made on the basis of capital formation by type of asset or by
updating the Input-Output Tables.
x.
At best, data on ICORs can be used to identify the trouble sectors but cannot be
directly used to specify policy choices. A consistent increase in a sectoral ICOR is an
indication that more disaggregated analysis (probably at firm-level) is required to determine
the causes of increasing inefficiency. In addition, ICOR is not a suitable indicator of return
on assets by ownership (private and parastatal) due to (a) the fact that GDP data in Kenya is
not disaggregated by ownership, and (b) data on parastatals would not include joint
ventures and would only include firms incorporated through Acts of Parliament. In
addition, the problems plaguing the parastatal sector are well documented and need not be
supported or counteracted by macroeconomic indicators such as the ICOR.

INCREMENTAL CAPITAL OUTPUT RATIO AS MEASURE OF PRODUCTIVITY OF

INVESTMENT: THEORY AND A KENYAN EXAMPLE
1.

INTRODUCTION

1.
The main factors of production are labour and capital. Early theories of growth
concentrated on the role of capital accumulation in economic development, assuming that
developing countries were capital-scarce, labour-surplus, economies. While there are
divergent views on what are the binding constraints on growth, we will proceed on the
assumption that the availability of investment -- from both domestic and foreign savings -determines a (but not the only) limit to growth of output. Furthermore, since a big portion
of capital is imported, the foreign exchange constraint (due to a structural external account
deficit) is almost translated to a capital constraint. It is necessary to study the trend in
returns on capital as efficiency in capital utilization has implications on growth, the
competitiveness of Kenyas exports, and on the imports required to finance capital
accumulation1. At least in the Kenya case, the GDP deflator is on average lower than the
fixed investment deflator, and the cost of capital therefore has a disproportionately large
influence on costs of production and consumer prices.
2.
There are two main approaches to the analysis of returns on investment at the
sectoral and aggregate levels. The first --capital-output ratio -- assumes fixed technical or
behavioural coefficients relating capital stock and output. This has its roots in the HarrodDomar growth model, which relates rate of growth of output with propensity to save and
the capital-output ratio. The second approach -- sources of growth or total factor
productivity growth -- breaks observed economic growth into components associated with
changes in factor inputs and a residual representing technical progress and other elements,
and normally uses an aggregate Cobb-Douglas production function of the form:
Y = ALK
Where Y is output, L is labour, K is capital, and are output elasticity coefficients for
labour and capital respectively, and A is a measure of Hicks-neutral technical change (i.e.
the ratio of the factor marginal products remain unchanged for a given capital-labour ratio)
and is an increasing function of time. A quick but approximate method of obtaining an
ICOR is the ratio of average annual share of investment in GDP to average annual growth
rate of GDP. It is important to state at the outset that the main criticism of the HarrodDomar growth model also applies to the capital-output ratio, i.e. the crucial assumption that
production takes place under conditions of fixed factor proportions in the medium term.
1

The paper makes reference to materials directly relevant to computation of capital-output ratios, but does
not dwell on general macroeconomic modeling in Kenya, for example, (a) the development and applications
of the Kenya Simulation Model (KENSIM) described in Slater and Walsham (1975), Slater, Walsham and
Shah (1977), and Masakhalia, Shah, Slater and Walsham (1977); and (b) and other sectoral and
macroeconomic planning models of the Kenyan economy (see, Karani and Howe, 1965; Hodd, 1974;
Whitacre, 1975; and World Bank, 1983).

3.
One of the popular measures of return on investment at the macro-level is the
capital-output ratio, which measures the relationship between capital and output. However,
since data on capital stock is usually unavailable or unreliable, the more common measure is
the incremental capital output ratio (ICOR). Its popular appeal is not based on its
conceptual or empirical usefulness but more because it only requires data on fixed
investment and GDP, which is available from national accounts data.
4.
Several studies have also proposed that there is a strong relationship between
economic growth and rates of investment in machinery and equipment (Hill, 1964), and the
composition of capital formation therefore matters2. As shown in Table 5, fixed investment
consists of Residential Buildings, Non-Residential Buildings, Construction and Works, Land
Improvement and Plantation Development, Transport Equipment, Machinery and other
Equipment, and Breeding Stock and Dairy Cattle. The different components of fixed
investment may have different capital-output ratios, which may not be identified in an
aggregate relationship between total investment and GDP growth in a sector. In addition,
some of the growth in GDP could be explained by the changing composition of fixed
investment over time, and the extent to which various components of capital formation
complement each other to generate long run economic growth.
2.

LITERATURE REVIEW

5.
Most of the literature on ICORs centres on methods of derivation and its adequacy
(or otherwise) as a measure of trends in return on investment at the sectoral and national
levels. A common concern in the literature is the span of period to be covered in the
computation of ICORs. A quick, back of the envelope, method of obtaining an ICOR is the
ratio of average annual share of investment in GDP to average annual growth rate of GDP.
A simple approach is to calculate the ICORs for sectors or the economy as a whole using the
formula:
ICORt = INVt-1/(GDPt - GDPt-1)
6.
There are various problems with this formulation for the ICOR. First, ideally, we
should calculate net ICOR using information on net investment -- gross investment minus
depreciation -- but estimates of depreciation are usually not reliable. Put in another way,
the gross ICOR does not capture differences in durability of investment, while net ICOR
does (with durable investments having low depreciation rates and nondurable investments
having high depreciation rates). Second, the lag between investment and production is
assumed to be one year, thereby giving big annual fluctuations in ICORs. The annual
fluctuations could also be attributed to changes in weather (especially for an economy such
as Kenyas which is basically agricultural), changes in rates of capacity utilization, variations
in factors other than capital, and differences in construction periods (which is likely to vary
2

Hill (1964) found that the relation between growth and one kind of investment cannot be the same
as that between growth and another kind ... In so far as any general association exists between growth and
investment, it is largely due to investment in machinery and equipment. This is especially the case for
growth in GNP per person employed, where all of the correlations, excepting that with machinery and
equipment, are quite trivial (cited in Morgan, 1966; and Aseto, 1977).

within and between sectors). The lag problem can be minimized by measuring ICOR over a
period.
7.
Chenery and Eckstein (1967; 1970), in a study of Latin America, starts from the
premise that ICOR is expected to be lower at higher rates of growth. This is because (a)
during times of rapid growth, capacity is likely to be utilized faster than it is created, while
during slow growth it is often created faster than it is utilized; and (b) when higher rates of
growth are based on greater investment, the part of gross investment used to replace old
equipment and to construct social overhead facilities usually represents a smaller share of
the total 3. In addition, Chenery and Eckstein (1970) say that annual ICORs cannot always
be used as units of observation in a time-series as year-to-year movements reflect the effects
of changes in degree of utilization of capital as well as in its amount. Chenery and Eckstein
(1970) say that those ratios are meaningful only when growth of GNP has been
constrained by the growth of capital stock. The annual series, however, are marked by
cycles, during which abnormally high (or negative) values for the ratio indicating the
creation of unutilized capacity, are followed by abnormally low values indicating that
capacity is being utilized faster than it is being created.
8.
Chenery and Eckstein define the conventional gross ICOR (Kt) as result of the
regression equation: Kt = K1 + Z/Rt+1, where K1 is a constant capital-output ratio for directly
productive net investment (with one year lag), Z is a constant share of income devoted to
replacement plus social overhead investment, and Rt+1 is following years growth rate of
GDP. This method of arriving at capital-output ratios is taken from Strout (1965). In the
model, fixed investment (INVEST) is the sum of net investment (INVNET) and
depreciation, which is assumed to bear a fixed relationship to the value added in a sector,
and is given as z*GDP. Dividing both sides by change in GDP, we get gross ICOR as the sum
of net ICOR and z/r, where r is the sectoral rate of growth4. Kt is a decreasing function of
Rt+1 because a high growth rate implies that the depreciation component will constitute a
smaller fraction of gross investment.
9.
In estimating capital requirements, Chenery and Eckstein reduced the estimated
value of z (the responsiveness of Kt to the growth rate) by one half, and constrained K1 to be
no less than two (as a capacity benchmark), which was not appreciably lower than the
lowest average incremental ratios found in the study. However, it would have been more
appropriate to establish a fixed capital-output ratio for each industry classification for a
benchmark year which independent evidence indicates was a period when capacity was
virtually fully utilized, rather than for the entire economy (Creamer, 1962; cited in Brown
and Conrad, 1967). Basically, Chenery and Eckstein decomposed the gross ICOR (Kt) into
two parts: one showing the effect of new investment on output (K1) and the other showing
the investment needed to replace worn-out capital. In the Kenya case, it is not necessary to
derive Z since we have estimates of depreciation from the composition of gross fixed capital
formation.
3

See, Hill, 1964; Leibenstein, 1966; and Strout, 1965. Earlier studies had also established a positive
association between ICOR and level of per capita income (Kuznets, 1960) and an inverse relationship
between ICOR and growth rate of GDP (Ohkawa and Rosovsky, 1962; and Leibenstein, 1966).
4
Shourie (1970; 1972) cautions about putting too much faith in such a functional relationship where the
ratios have the same denominator, as each ratio in the equation is growth rate of GDP plus something else.
See also, Kuh and Meyer (1955) and Madansky (1964).

10.
One of the early uses of ICORs in evaluating trends in return on investment in
Kenya is by the World Bank (1969; 1975). The World Bank starts from the CheneryEckstein (1967; 1970) approach, but instead of fixing K1, the value of Z is derived from the
implied depreciation rates in the Input-Output Tables for Kenya, 1967 (Kenya, 1972). The
World Bank obtained K1 as K-(Z/R) and then run a regression of K1 on time to test whether
productivity of investment was increasing or declining. The World Bank (1975) observed
that the incremental capital output ratio showed that efficiency of resource use in Kenya
was high by international standards, but was on an upward trend due to shift in the
structure of investment and growth towards those sectors in which ICOR was either high
or rising, and increase in ICORs within a number of important sectors.
11.
Tobin (1972) estimated capital-output ratios for fourteen sectors of the Kenyan
economy for the period 1964-71. He objected to the use of gross ICORs on the grounds that
no allowance is made for depreciation, and the implication is that no gross investment is
needed if output is not growing. Tobin also objected to the customary computation of the
ICOR (as ratio of gross investment over a span of one year or more to the increment in GDP
over the same period) as the change in ICOR from year to year does not imply genuine
change in the parameter we intend to measure, and for this reason preferred a regression
procedure. Using observed data on sectoral capital formation and sectoral GDP, Tobin
derived estimates of capital stock and ICORs under various assumptions about depreciation
rates.
12.
Tobins methodology circumvents the problem arising from the fact that capital
formation data is in gross terms (including depreciation), and that estimates of capital stock
(based on Powell, 1973) and depreciation rates were not available then (1972). However, a
regression approach assumes that ICORs are constant over the period, and therefore does
not capture the annual fluctuations in ICORs. Tobin makes the important observation that
projections of gross investment are insensitive to the assumptions on the depreciation rates.
As Tobin puts it, when the estimates thus obtained are used to calculate the gross
investment required for a given sectoral GDP and its rate of growth, the low-depreciation
estimate says there is a large net investment requirement but not much replacement
investment, while the high depreciation estimate says little net investment is required but a
large amount of replacement. This implies that, while net ICORs are useful in estimating
trends in return on capital at the aggregate level, in projecting capital requirements over a
Plan period, it does not matter whether gross or net ICORs are used or what the rate of
depreciation is assumed to be.
13.
Paul Streeten (1976) makes wide-ranging criticisms of the capital-output ratio, and
questions the concept on both empirical and logical grounds. He says that this approach
introduces a bias that capital is the only, or the main, source of development in developing
countries. In addition, he asks valid questions about the validity of the concept, but
unfortunately we will not be able to dwell on them here. He concludes that if we possessed
all the required microeconomic information, the aggregate ratio would be unnecessary. The
capital/output model is thus either useless or unnecessary.
14.
Lancaster (1981) argues that using three-year moving totals in place of single-year
values gives a consistent estimate of the ICOR for any given period over which it may be
7

considered as constant. The Ministry of Planning and National Development (MPND)

computes ICORs as part of the routine macro-modelling work. In calculating ICORs at the
sectoral and aggregate levels, the MPND uses three-year moving totals in place of single
year values of investment and output. Theoretically, it is more ideal to derive the aggregate
ICOR by weighting sectoral ICORs with the sectors share in increases in output. However,
in doing an international comparison of ICORs, it is more appealing to use the MPND
approach to avoid the tedious work of analyzing sectoral data for a large number of
countries. Another appeal of MPND approach is the use of depreciation estimates.
15.
The MPND uses two alternative sectoral depreciation rates (share of current income
devoted to replacement), 0.02 or 0.05, based on whether the share of machinery in total
sectors capital formation is less or more than 70 percent, using data on fixed investment by
type of asset which is published in the annual Statistical Abstract. As shown in Table 5,
Transport, Storage and Communication had the highest share of 15.71 percent of total fixed
investment, followed by Manufacturing at 11.90 percent and Agriculture at 6.96 percent.
The share of Machinery and Other Equipment in gross fixed capital formation in 1989 was
99.5 percent in Mining and Quarrying, 90.8 percent in Building and Construction, 78.4
percent in Manufacturing, 67.3 percent in Trade, Restaurants and Hotels, and 47.7 percent
in Transport, Storage and Communication. The share of transport equipment was high in
Trade, Restaurants and Hotels at 13.2 percent and 45.2 percent in Transport, Storage and
Communication, and the combined shares of Machinery and Other Equipment and
Transport Equipment were therefore 80.5 percent and 92.9 percent, respectively.
3.
3.1

EMPIRICAL ESTIMATES OF ICOR

Data on Capital Formation and Output

16.
Investment, as given in the Statistical Abstract, is the sum of new capital assets in
the form of residential buildings, non-residential buildings, construction and works, land
improvement and plantation development, transport equipment, machinery and other
equipment, and breeding stock and dairy cattle. Investment so defined is in gross terms,
while net investment is gross investment minus depreciation. Our analysis will relate to
fixed investment. It will not cover changes in stocks (inventory accumulation), which is the
other component of gross investment. Inventory accumulation is not necessarily related to
growth in output, but is also influenced by other factors e.g. import controls (building up
stocks when the controls are relaxed and spending when the controls are tight), and
expectations about trends in exchange rates, interest rates and inflation.
17.
During the period 1972-76, gross fixed capital formation at constant 1982 prices is
generally characterized by a declining trend. However, this trend was interrupted briefly in
1977 and 1978 when capital formation grew by 20.9 percent and 17.6 percent, respectively.
The high growth rate in the two years emanated from the coffee boom, which led to a surge
in investment in agriculture, manufacturing, transport/storage and communication,
building and construction, ownership of dwellings, and Government services. The price
increase from the coffee boom was passed on to the farmers as it was not taxed, and farmers
converted an estimated 60 percent of the windfall into savings (Bevan, Collier and
8

Gunning, 1987; see also, Killick, 1981, Davis, 1983, and Balassa, 1988). However, real
investment in the services sector remained below the 1975 level throughout the boom
period. The 1979 oil crisis and the 1980 drought reversed the upward trend, followed by
some recovery in 1981, and a further reversal in 1982 due to political disturbances. In the
period 1981-85, fixed capital formation registered a continuous decline but started picking
up after 1986 due to recovery from drought, the 1986 mini-boom in coffee prices, and the
fact that imports of capital goods are eligible under donor-financed structural adjustment
loans.
18.
Kenya registered declining trend in GDP growth rates in early 1970s. However, the
1976-77 coffee boom reversed the trend and GDP growth rates rose tremendously,
registering a high 8.1 percent in 1977. The rising trend in GDP growth rates was not
sustained for long: after 1977, GDP growth rates took a declining trend as a result of the
1979 oil price shock and the 1980 drought. In 1981, the economy registered a growth rate of
6.0 percent, but was adversely affected by the political disturbances of 1982 when GDP
growth plunged to 3.4 percent and continued declining to the lowest level (0.74 percent) in
1984 when the country experienced severe drought. Since 1985, the economy has managed
to grow at an annual rate of 5 percent, mainly due to Governments economic reform
measures, good weather, and availability of foreign resources. The data shows that periods
of high capital formation in 1970s and the early 1980s were followed by high GDP growth
rates. However, in the second half of the 1980s, the high GDP growth rates cannot be
explained by capital formation as fixed investment at constant prices was lower in 1980s
compared to the late 1970s. Therefore, the high GDP growth rates in the late 1980s can be
attributed to increased utilization of capacity created in the earlier years.
19.
We shall not interpret ICORs for producers of Government services due to
conceptual and data problems. In national accounts terminology, Government is defined to
cover units performing government functions, that is, the implementation of public policy
through the provision of primarily non-market services and the transfer of income,
supported mainly by compulsory levies on other sectors (Host-Madsen, 1979, p. 72). In
Kenyas national accounts, the Government sector includes public administration, defence,
education, health, agricultural services and other services. GDP accruing to producers of
Government services excludes:

All enterprise activities of the government sector e.g. building and construction and
forestry (see, Kenya, 1977; and FitzPatrick, 1989, for details); and
Consumption of fixed capital, other than an imputed amount in respect of vehicles
(calculated as average value of the replacement of vehicles during the previous three
years).

20.
In short, Government GDP includes only labour costs and some adjustments to
cover depreciation of vehicles, but excludes all activities where the Government behaves in
a private sector manner -- which is included in the relevant nongovernment national
accounts sectors. In the Government sector, labour costs and GDP are almost identical, the
only difference being its operating surplus (depreciation of vehicles). The seemingly
obvious response to the problem would be to focus on GDP excluding producers of
government services, but this still retains the government expenditures which are
nongovernment in nature. What is usually termed as contribution of public sector to
9

capital formation also lumps up parastatals and Government capital formation on

nongovernment activities. It is therefore difficult to obtain fixed investment,
depreciation, labour costs and net operating surplus for private, Government and parastatal
sectors separately. Indeed, due care should be taken in computing macroeconomic ratios
using Government GDP (specifically producers of government services). For example,
capital-output ratio of producers of government services is almost identical to the ratio of
investment to change in the wage bill. However, GDP generated by government
expenditure on nongovernment economic activities is derived in the same way as private
and parastatal sector GDP.
3.2

Methodology

21.
The approach used in the computation of gross ICORS is to assume one-year, threeyear and five-year lags (gestation periods between investment and output) separately. A
similar exercise is undertaken assuming depreciation rates (share of current income devoted
to replacement) given in the MPND manual to arrive at sectoral net ICORs. The net ICOR
is computed as a ratio of gross fixed capital formation to Net Domestic Product (NDP) in the
following year, since NDP equals GDP minus depreciation of capital.
22.
The depreciation rates used in computation of net sectoral ICORs are 0.02 for
Agriculture; Forestry; Electricity and Water; Finance, Real Estate and Business Services;
Ownership of Dwellings; Other Services; and Producers of Government Services, and 0.05
for Mining and Quarrying; Manufacturing; Building and Construction; Trade, Restaurants
and Hotels; and Transport, Storage and Communication. The sectoral depreciation rates
were used to derive weighted depreciation rate for total monetary GDP at constant prices
for each year, with weights as sector shares in GDP. The computed aggregate depreciation
rate showed minimal annual variations, and net ICOR for total monetary GDP was
therefore computed using the average over the period 1972-1989 of 0.030427674. The
estimates of share of depreciation in gross value-added are lower than those obtained by the
World Bank (1975) using Input-Output Tables for Kenya 1967 (Kenya, 1972), which were
0.0711 for total monetary GDP, 0.1116 for mining and quarrying, 0.0994 for manufacturing,
0.0520 for building and construction, and 0.1543 for transport, storage and communication.
23.
When the depreciation is assumed to be zero, ICOR derived using moving averages
is equivalent to totalling investment between the base year and the final year and using the
difference in GDP between the base and the final year (with one year lag). The use of
simple moving average encounters several questions. The first problem is assigning the
same weight to each years investment and GDP without much regard to its justification
from empirical work or economic theory. A more realistic functional form is to assume that
incremental output in the current year is related to capital formation carried during
previous years (e.g. three) excluding the current year, such that INVt = v [a1GDPt+1 +
a2GDPt+2 + a3GDPt+3]; where v is the capital-output ratio, a1 +a2 + a3 = 1, and a1 > a2 > a3.
However, this formulation would require empirical estimates of a1, a2 and a3.
24.
The second problem is the reference year to assign the moving average. The two
common methods are to centre it or place it at the end of the period. However, we have
assigned the moving average to the end of period, although one is able to interpret the
results as referring to centre of period by changing the reference year in interpreting the
10

results. In addition, since the implicit GDP and fixed investment deflators are not identical,
we have used constant price GDP and fixed investment data.
3.3

Findings

25.
Unlike other macroeconomic ratios (e.g. savings ratio), ICOR is a ratio of stock
(capital) to flow (income) and therefore has a time dimension. In using ICOR to determine
trend in return on investment, it is important to consider the length of period. During the
period 1972-89, the range of gross ICOR for total GDP is 3.23 (in 1986) to 25.03 (1984)
assuming one year lag, 3.57 (1987) to 9.93 (1975) assuming three-year moving average, and
3.70 (1989) to 7.58 (1984) assuming five-year moving average. Therefore, the range declines
(and ICORs appear more stable) the longer the lag period considered. A second important
factor is the base output. For example, due to slowdown in growth in 1984 due to drought,
ICORs using 1984 as the base year will show a decline in ICORs, and thus give a misleading
indication of increase in the productivity of investment. The decline in ICORs due to the
1984 drought will be reflected in 1985 for one-year lag, 1987 for three-year lag, and 1989
for five-year lag. ICORs with 1979 and 1984 (when there was drought though with
differing impact on output) as base years will be biased downwards.
26.
The ICORs for the entire economy tend to be more stable the longer the lag period
considered and the higher the depreciation rate, i.e. the net ICORs are more stable than
gross ICORs. ICORs for the whole economy show a declining trend over time and are lower
and more stable in the 1980s than in 1970s. The net ICOR, with three-year moving average
and assuming a depreciation rate of 0.05, declined from 3.81 in 1975 to 2.05 in 1989,
compared with 4.98 in 1975 to 2.55 in 1989 using the weighted average depreciation rate.
The downward trend may be a result of gradual increase in utilization of productive
capacity built up in second half of the 1970s following the coffee boom and the breakup of
the East African Community. After 1986, net ICORs (with three-year moving average)
declined, but have stabilized around a value of 2.5. The decline in net ICOR in the second
half of the 1980s could be attributed to increased efficiency in the use of installed capacity
due to economic reforms. The recent stabilization of the ICOR indicates that this source of
growth might be running out of steam, and there is need for increased capital formation in
the economy.
27.
Some of the sectoral net ICORs (using three-year moving average) exhibit a
declining trend, especially for the major national accounts sectors such as manufacturing,
trade, and other services; while other sectors show considerable fluctuations such as
mining and quarrying, building and construction, and electricity and water. The estimated
values for some sectors are unusually large (positive and negative) for some periods which
in general is a consequence of decline or stagnation in sectoral GDP in the period.
28.
For the agricultural sector, the net ICOR (using three-year moving average)
increased to a peak of 2.02 in 1980 due to unfavourable weather conditions (which
adversely affected output) and increased investment during 1977-78 due to the coffee
boom. The net ICOR declined to 0.85 in 1983 due to improvement in weather conditions,
increased in 1984 and 1985 due to drought, but declined again after 1986 as the favourable
weather conditions and structural adjustment (mainly improved producer prices) began to
impact on producers. The ICOR as a measure of trends in return on capital in the
11

agricultural sector is somewhat deceptive. During the 1970s, agricultural investment

increased, and the trend was then reversed such that the 1989 investment is lower than that
of 1972. Other things being equal, ICOR in the agricultural sector has increased when
investment increases and declined when investment declines. This confirms the fact that
agricultural output is also influenced by a host of other factors including weather, quality of
crop and animal husbandry, agricultural producer prices (including export prices for the
export crops), and other Government policies.
29.
For the manufacturing sector, the net ICORs (using three-year moving average)
were high in the mid-1970s, probably reflecting low capacity utilization due to shortage of
imported intermediate inputs as a result of foreign exchange shortages brought about by the
1973 oil price shock. However, ICORs fell briefly during the coffee boom of 1976-77 due to
foreign exchange availability, but exhibit a rising trend for the period 1979-81. The rising
trend during this period could be due to the 1979 oil price shock and the excess capacity
created by the breakup of the East African Community and the increased capital formation
following the coffee boom. After 1981, net ICOR has shown a declining trend, having fallen
from 3.46 in 1981 to 2.00 in 1989. The observed declined in the ICOR in the 1980s is
probably due changing substitution between factors of production away from capital
intensity (as indicated by low capital formation) and to increased utilization of idle capacity
created in the earlier years. Since manufacturing output has consistently increased during
the period 1972-1989 while investment has on average declined, the trend in ICORs values
reflects actual improvements in efficiency of investment and in capacity utilization. The
annual variations on a trend are more likely due to fluctuations in availability of imported
inputs brought about by import controls and foreign exchange shortages. The import
dependence of the manufacturing sector, including the fact the sector is a net user of
foreign exchange, implies that the performance of the sector will continue to depend on
movements in the external account and on the success of trade liberalization.
30.
The building and construction sector is characterized by annual fluctuations in both
output and investment, which gives unstable ICORs. When output growth is negative,
ICORs are also negative. While the unusually large or negative ICORs of course implies
stagnation and are signs of serious problems in the sector, the estimated ICORs should be
interpreted with caution. Negative ICORs are theoretically meaningless: does a negative
ICOR imply that lower investment would have resulted in higher output?
31.
The estimated net ICORs (with three-year moving average) for the trade,
restaurants and hotels registered a significant downward trend, but the trend was
interrupted during the period 1982-83. Although net ICOR has been decreasing, the sector
has also been characterized by a marked decline in investment, implying that capacity
utilization (e.g. hotel occupancy) has been improving. The transport and communications
sector exhibited a declining trend in estimated net ICORs until 1984, but climbed from 3.76
in 1984 to 7.01 in 1989. The net ICORs for the sector are relatively higher than those of
other sectors like agriculture, trade and manufacturing, probably because the sector is
generally capital-intensive. The period 1985-89 was also characterized by high capital
formation due to increased imports for communications facilities.
32.
Disregarding the 1984 drought year, gross ICOR (with three-year moving average)
for the whole economy has been more stable and lower in the 1980s than in the 1970s.
12

Aggregate gross ICORs declined during the 1970s, and had a peak of 9.76 in 1984 mainly
due to drought which affected agricultural production and supply of raw materials to
agricultural processing industries. However, ICOR declined in the second half of the 1980s
to around 3.7 due to recovery in agriculture; and increased productivity of manufacturing
and trade, restaurants and hotels.
33.
The net ICOR, with one-year lag and assuming a weighted depreciation rate of
0.030427674, declined from 5.07 in 1973 to 2.49 in 1989. After 1985, net ICORs (with oneyear lag) declined, but have stabilized around a value of 2.3. The net ICOR, with three-year
moving average and assuming a weighted depreciation rate, declined from 4.98 in 1975 to
2.55 in 1989. After 1986, net ICORs (with three-year moving average) declined, but have
stabilized around a value of 2.5. The net ICOR, with five-year moving average and
assuming a weighted depreciation rate, declined from 4.06 in 1977 to 2.12 in 1989. After
1986, net ICORs (with five-year moving average) declined, but have stabilized around a
value of 2.4. The interpretation of net ICOR for total monetary GDP should be based on the
weighted average depreciation rate, and the depreciation rates of 0.02 and 0.05 are
presented only to show the sensitivity of computed net ICORs on assumptions of the
depreciation rate.
34.
It is however important to note that the computed ICOR is affected by the poor
economic performance in 1984 when the economy grew by 0.74 percent in real terms, and
the particular years affected depend on the assumed gestation period (lag) between
investment and output. The low growth in output in 1984 was also accompanied by
relatively high growth rate in gross fixed capital formation of 3.05 percent in real terms.
4.

SUMMARY AND CONCLUSION

35.
The data on net ICORs are assumed to measure the impact of flow of capital services
to the flow of output. This is expected to minimize errors of the capital-output ratio as a
stock-flow concept. However, the net ICOR does not completely remove such bias because
(a) it does not take into account variations in capacity utilization, and (b) the difficulties of
arriving at reasonable indicators of depreciation rates. The cut-off point assumed in the
MPND estimates (i.e. assuming values of either 0.02 or 0.05) might not reflect actual
depreciation rates. More reliable estimates of depreciation rates should be made on the basis
of capital formation by type of asset, which is available from the annual Statistical Abstract.
Another source would be an updated Input-Output Tables, which the Ministry of Planning
and National Development is in the process of revising.
36.
As expected, net ICORs are lower than gross ICORs because it nets out the
proportion of output devoted to replacement investment. The trend depicted by net ICORs
is largely similar to that of gross ICORs, although one should interpret inter-sectoral
variations in net ICORs with caution as they are sensitive to the assumptions on the
depreciation rates.
37.
It is important to consider the impact of the patterns of growth on ICORs. This is, of
course, simplistic as it disregards interdependence of sectors through forward and backward
13

linkages, which are best captured in an input-output analysis. The input-output tables also
assume fixed input coefficients and do not therefore take into account structural change
that is likely to result from the economic reforms that the Government is undertaking.
During the 1980s, ICORs have declined in agriculture, manufacturing, trade, finance/real
estate, and remained somewhat stable in other sectors. This can be interpreted as reflecting
improvements in efficiency as a result of economic reforms e.g. trade liberalization, flexible
exchange rate management, attractive agricultural producer prices, and the maintenance of
positive real interest rates. The return on capital (disregarding the impact of other factors
and changes in the input mix) is higher in agriculture than in manufacturing. This implies
that it is necessary to improve efficiency in manufacturing even further and reduce import
dependence through aggressive export promotion and change in the input mix.
38.
At best, data on ICORs can be used to identify the trouble sectors but cannot be
directly used to specify policy choices. A consistent increase in a sectoral ICOR is an
indication that more disaggregated analysis (probably at firm-level) is required to determine
the causes of increasing inefficiency and arrive at specific programs of action. In addition,
ICOR is not a suitable indicator of return on assets by ownership (private and parastatal)
due to (a) the fact that GDP data in Kenya is not disaggregated by ownership, and (b) such
data would exclude joint ventures and would only include firms incorporated through Acts
of Parliament. In addition, the problems plaguing the parastatal sector are well documented
and need not be supported or counteracted by macroeconomic indicators such as the ICOR.
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18

NOTES ON COMPUTATION OF INCREMENTAL CAPITAL-OUTPUT RATIO

Gross sectoral ICOR with one year lag is derived thus:
ICORt = It-1/(Yt-Yt-1)
****
Net sectoral ICOR (with one year lag) is derived thus:
ICORt = It-1/(Yt-(1-d)Yt-1)
***
Gross sectoral ICORs (with three year moving average):
ICORt = (It-1, It-3)/((Yt,Yt-2) - (1-d)(Yt-1,Yt-3)) but assuming that d (depreciation) = 0
***
Net sectoral ICORs (with three year moving average):
ICORt = (It-1, It-3)/((Yt,Yt-2) - (1-d)(Yt-1,Yt-3))
***
Gross sectoral ICORs (with five year moving average):
ICORt = (It-1, It-6)/((Yt,Yt-5) - (1-d)(Yt-1,Yt-6)) but assuming that d (depreciation) = 0
***
Net sectoral ICORs (with five year moving average):
ICORt = (It-1, It-6)/((Yt,Yt-5 - (1-d)(Yt-1,Yt-6))

19

STATISTICAL ANNEX
Table 1: Gross Fixed Capital Formation by Industry at Current Prices
Table 2: Gross Fixed Capital Formation by Industry at Constant 1982 Prices
Table 3: Gross Fixed Capital Formation: Growth Rates (%)
Table 4: Gross Fixed Capital Formation Deflators by Industry
Table 5: Capital Formation: Analysis by Industry and Type of Asset, 1989
Table 6: Gross Domestic Product at Current prices
Table 7: Gross Domestic Product at Constant 1982 Prices
Table 8: Gross Domestic Product at Constant 1982 Prices: Growth Rates (%)
Table 9: Implicit Gross Domestic Product Deflators
Table 10: Gross Sectoral ICORs: One-Year Lag
Table 11: Gross Sectoral ICORs: Three-Year Moving average
Table 12: Gross Sectoral ICORs: Five-Year Moving average
Table 13: Net Sectoral ICORs: One-Year Lag
Table 14: Net Sectoral ICORs: Three-Year Moving average
Table 15: Net Sectoral ICORs: Five-Year Moving average

20

Table 1: Gross Fixed Capital Formation by Industry (millions of Kenyan pounds at current prices)
1972
Traditional Economy
Ownership of Dwellings

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

10.65

12.74

15.17

20.12

23.01

27.51

33.17

39.65

43.64

50.52

54.18

66.42

77.75

76.75

81.89

89.51

97.62

109.49

Monetary Economy
Enterprises & Non-Profit Institutions
Agriculture

13.26

12.57

20.17

22.54

24.94

42.93

51.13

42.05

47.16

54.85

51.21

53.80

58.46

75.70

89.64

106.36

113.52

102.8

Forestry

0.26

0.25

0.23

0.15

0.34

0.68

0.73

0.69

1.03

0.75

0.68

0.24

0.50

0.60

0.38

0.31

1.66

1.08

Fishing

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Mining & Quarrying

1.70

1.46

3.60

1.53

1.62

1.94

4.95

4.10

5.02

4.85

4.05

5.09

7.12

4.88

7.03

12.74

10.21

9.42

28.19

31.84

29.86

31.23

45.96

63.27

83.71

88.52

76.91

90.31

67.03

111.70

95.33

101.76

161.34

171.83

218.74

249.91

Electricity & Water

8.51

12.17

10.03

17.19

33.15

33.72

40.20

31.99

41.26

65.47

75.22

57.19

37.00

43.30

48.55

62.20

81.70

124.51

Building & Construction

8.50

9.14

7.00

7.81

9.72

15.50

32.25

25.68

33.41

32.90

28.86

59.35

68.25

31.47

50.31

70.19

70.46

65.2

Trade, Restaurants & Hotels

8.19

8.86

10.19

14.47

20.61

21.42

20.24

17.30

28.29

19.69

21.78

26.44

24.75

34.51

24.86

24.88

36.35

33.55

Transport, Storage & Comm.

22.47

28.03

35.46

50.39

50.41

79.41

110.50

101.65

102.80

113.48

101.50

110.14

149.94

164.19

289.04

306.66

269.28

349.24

Finance, Real Estate & Bus.

2.12

2.04

4.01

4.76

3.46

4.42

7.57

8.25

10.19

23.68

9.42

16.68

18.42

19.15

13.46

21.60

38.40

47.07

19.22

16.16

19.82

23.09

17.12

23.12

38.66

55.10

62.93

70.12

72.34

47.67

57.01

55.70

90.86

104.55

115.85

124.43

7.60
120.02

8.92
131.44

8.52
148.89

7.16
180.32

11.63
218.96

17.25
303.66

20.33
410.27

31.76
407.09

41.25
450.25

53.56
529.66

55.29
487.38

60.72
549.02

59.51
576.29

80.02
611.28

75.89
851.36

85.80
967.12

105.98
1062.15

145.65
1252.86

Public Administration

4.84

4.87

4.90

5.35

4.00

7.95

14.66

14.36

20.06

17.75

14.43

17.06

29.61

34.52

69.62

77.30

56.98

128.19

Defence

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.02

0.05

0.02

Education

3.59

3.88

4.12

4.89

5.10

7.23

8.87

11.75

20.16

21.60

20.91

14.75

16.48

24.81

31.00

31.30

87.41

54.24

Health

2.94

2.84

3.30

4.35

8.19

8.33

10.91

14.06

12.57

8.78

8.78

8.28

9.12

10.65

12.89

12.60

21.48

12.38

Agricultural Services

1.09

1.63

2.96

5.71

8.66

9.00

8.64

8.96

13.08

12.31

12.50

10.55

6.43

10.40

15.92

13.43

19.50

21.38

20.64
33.10

22.21
35.43

23.45
38.73

21.15
41.45

23.69
49.64

26.46
58.97

30.07
73.15

47.73
96.86

61.28
127.15

84.08
144.52

70.05
126.67

51.39
102.03

91.47
153.11

111.98
192.36

90.52
219.95

95.46
230.11

177.21
362.63

133.47
349.68

Manufacturing

Ownership of Dwellings
Other Services
TOTAL
Producers of Government Services

Other Services
TOTAL
Traditional Economy
Monetary Economy
GRAND TOTAL
Memorandum items
TOTAL GDP
Ratio of fixed investment to GDP (%)

10.65

12.74

15.17

20.12

23.01

27.51

33.17

39.65

43.64

50.52

54.18

66.42

77.75

76.75

81.89

89.51

97.62

109.49

153.12
163.77

166.87
179.61

187.62
202.79

221.77
241.89

268.60
291.61

362.63
390.14

483.42
516.59

503.95
543.60

577.40
621.04

674.18
724.70

614.05
668.23

651.05
717.47

729.40
807.15

803.64
880.39

1071.31
1153.20

1197.23
1286.74

1424.78
1522.40

1611.54
1721.03

663.53
24.68

754.97
23.79

900.34
22.52

1087.82
22.24

1313.56
22.20

1683.76
23.17

1833.45
28.18

2033.19
26.74

2298.41
27.02

2659.49
27.25

3033.05
22.03

3455.35
20.76

3851.78
20.96

4418.59
19.92

5114.96
22.55

5612.51
22.93

6391.11
23.82

7330.50
23.48

21

Table 2: Gross Fixed Capital Formation by Industry (millions of Kenyan pounds at 1982 prices)
INDUSTRY
Traditional Economy
Ownership of Dwellings
Monetary Economy
Enterprises & Non-Profit Institutions
Agriculture
Forestry
Fishing
Mining & Quarrying
Manufacturing
Electricity & Water
Building & Construction
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
TOTAL
Producers of Government Services
Public Administration
Defence
Education
Health
Agricultural Services
Other Services
TOTAL
Traditional Economy
Monetary Economy
GRAND TOTAL

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

40.32

43.62

41.80

49.56

48.66

52.30

57.59

59.89

54.41

57.87

54.18

59.35

65.01

56.39

56.67

53.57

53.57

53.93

50.57
1.00
0.00
7.94
138.83
31.29
41.05
38.08
87.09
9.63
73.73
34.16
513.37

46.34
0.88
0.00
5.76
138.37
36.99
40.68
38.64
100.39
8.85
56.30
35.80
509.00

59.73
0.64
0.00
11.70
95.48
25.57
24.50
36.09
102.12
11.90
55.17
26.06
448.96

59.84
0.33
0.00
4.80
92.62
36.54
23.31
43.13
115.05
12.13
57.47
17.73
462.95

51.35
0.64
0.00
3.74
103.14
63.69
22.39
47.21
96.07
7.45
36.44
24.39
456.51

81.96
1.15
0.00
3.84
125.82
56.74
30.75
41.74
139.05
8.62
44.16
32.09
565.92

85.85
1.09
0.00
8.92
147.83
61.74
57.11
35.22
170.31
12.99
65.25
33.89
680.20

61.62
0.89
0.00
6.57
137.66
42.69
40.78
26.88
134.43
12.56
83.50
49.42
597.00

61.86
1.22
0.00
7.55
110.08
49.88
48.14
39.51
127.84
12.67
78.66
55.28
592.69

64.10
0.83
0.00
6.02
109.66
76.01
40.16
51.03
102.11
26.75
80.44
63.57
620.68

51.21
0.68
0.00
4.05
67.03
75.22
28.86
21.78
101.50
9.42
72.34
55.29
487.38

43.82
0.20
0.00
3.58
81.01
49.53
41.82
21.44
83.27
14.32
42.30
47.31
428.60

40.35
0.38
0.00
4.88
65.65
27.01
46.90
17.88
105.30
14.20
47.46
43.87
413.88

50.84
0.40
0.00
3.11
65.18
29.05
20.29
24.22
106.60
13.05
40.79
55.10
408.63

53.79
0.23
0.00
3.64
83.87
29.93
27.01
14.23
144.83
7.58
62.67
45.49
473.27

58.87
0.18
0.00
6.73
89.64
35.68
37.19
13.36
151.08
11.86
64.50
49.55
518.64

60.09
0.78
0.00
5.44
112.53
43.40
37.07
18.98
119.62
20.74
46.30
57.84
522.79

47.71
0.50
0.00
4.12
108.59
60.09
28.41
14.80
145.32
22.37
61.18
69.26
562.35

18.89
0.00
15.48
11.49
4.39
72.79
123.04
40.32
636.41
676.73

16.83
0.00
14.84
10.17
5.51
66.21
113.56
43.62
622.56
666.18

13.16
0.00
11.46
8.99
7.85
58.24
99.70
41.80
548.66
590.46

12.52
0.00
11.99
10.33
12.62
45.24
92.70
49.56
555.65
605.21

7.91
0.00
10.29
13.79
16.15
44.85
92.99
48.66
549.50
598.16

14.31
0.00
13.68
15.07
15.98
45.79
104.83
52.30
670.75
723.05

23.68
0.00
14.88
13.85
14.11
45.91
112.43
57.59
792.63
850.22

20.66
0.00
17.17
16.01
12.78
64.00
130.62
59.89
727.62
787.51

24.97
0.00
26.38
17.74
16.50
74.59
160.18
54.41
752.87
807.28

20.39
0.00
25.00
14.51
14.21
95.14
169.25
57.87
789.93
847.80

14.43
0.00
20.91
8.78
12.50
70.05
126.67
54.18
614.05
668.23

14.64
0.00
12.39
7.09
9.17
44.73
88.02
59.35
516.62
575.97

22.36
0.00
12.70
7.41
4.82
67.37
114.66
65.01
528.54
593.55

23.80
0.00
17.42
7.88
7.14
75.90
132.14
56.39
540.77
597.16

43.44
0.00
19.38
8.57
10.33
56.41
138.13
56.67
611.40
668.07

44.46
0.01
18.28
7.51
7.95
55.64
133.85
55.46
652.49
707.95

29.50
0.02
47.92
11.63
9.97
93.89
192.93
53.57
715.72
769.29

58.85
0.08
26.33
5.76
9.78
64.33
165.13
53.93
727.48
781.41

22

Table 3: Gross Fixed Capital Formation: Growth Rates (%)

INDUSTRY
Traditional Economy
Ownership of Dwellings
Monetary Economy
Enterprises & Non-Profit Institutions
Agriculture
Forestry
Fishing
Mining & Quarrying
Manufacturing
Electricity & Water
Building & Construction
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
TOTAL
Producers of Government Services
Public Administration
Defence
Education
Health
Agricultural Services
Other Services
TOTAL
Traditional Economy
Monetary Economy
GRAND TOTAL

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

8.18

-4.17

18.56

-1.82

7.48

10.11

3.99

-9.15

6.36

-6.38

9.54

9.54

-13.26

0.50

-5.47

0.00

0.67

-8.36
-12.00

28.90
-27.27

0.18
-48.44

-14.19
93.94

59.61
79.69

4.75
-5.22

-28.22
-18.35

0.39
37.08

3.62
-31.97

-20.11
-18.07

-14.43
-70.59

-7.92
90.00

26.00
5.26

5.80
-42.50

9.44
-21.74

2.07
333.33

-20.60
-35.90

-27.46
-0.33
18.22
-0.90
1.47
15.27
-8.10
-23.64
4.80
-0.85

103.13
-31.00
-30.87
-39.77
-6.60
1.72
34.46
-2.01
-27.21
-11.80

-58.97
-3.00
42.90
-4.86
19.51
12.66
1.93
4.17
-31.96
3.12

-22.08
11.36
74.30
-3.95
9.46
-16.50
-38.58
-36.59
37.56
-1.39

2.67
21.99
-10.91
37.34
-11.59
44.74
15.70
21.19
31.57
23.97

132.29
17.49
8.81
85.72
-15.62
22.48
50.70
47.76
5.61
20.19

-26.35
-6.88
-30.86
-28.59
-23.68
-21.07
-3.31
27.97
45.82
-12.23

14.92
-20.03
16.84
18.05
46.99
-4.90
0.88
-5.80
11.86
-0.72

-20.26
-0.38
52.39
-16.58
29.16
-20.13
111.13
2.26
15.00
4.72

-32.72
-38.87
-1.04
-28.14
-57.32
-0.60
-64.79
-10.07
-13.03
-21.48

-11.60
20.86
-34.15
44.91
-1.56
-17.96
52.02
-41.53
-14.43
-12.06

36.31
-18.96
-45.47
12.15
-16.60
26.46
-0.84
12.20
-7.27
-3.43

-36.27
-0.72
7.55
-56.74
35.46
1.23
-8.10
-14.05
25.60
-1.27

17.04
28.67
3.03
33.12
-41.25
35.86
-41.92
53.64
-17.44
15.82

84.89
6.88
19.21
37.69
-6.11
4.32
56.46
2.92
8.93
9.59

-19.17
25.54
21.64
-0.32
42.07
-20.82
74.87
-28.22
16.73
0.80

-24.26
-3.50
38.46
-23.36
-22.02
21.48
7.86
32.14
19.74
7.57

-10.91

-21.81

-4.86

-36.82

80.91

65.48

-12.75

20.86

-18.34

-29.23

1.46

52.73

6.44

82.52

2.35

-33.65

99.49

-4.13
-11.49
25.51
-9.04
-7.70
8.18
-2.18
-1.56

-22.78
-11.60
42.47
-12.04
-12.21
-4.17
-11.87
-11.37

4.62
14.91
60.76
-22.32
-7.02
18.56
1.27
2.50

-14.18
33.49
27.97
-0.86
0.31
-1.82
-1.11
-1.16

32.94
9.28
-1.05
2.10
12.73
7.48
22.07
20.88

8.77
-8.10
-11.70
0.26
7.25
10.11
18.17
17.59

15.39
15.60
-9.43
39.40
16.18
3.99
-8.20
-7.38

53.64
10.81
29.11
16.55
22.63
-9.15
3.47
2.51

-5.23
-18.21
-13.88
27.55
5.66
6.36
4.92
5.02

-16.36
-39.49
-12.03
-26.37
-25.16
-6.38
-22.27
-21.18

-40.75
-19.25
-26.64
-36.15
-30.51
9.54
-15.87
-13.81

2.50
4.51
-47.44
50.61
30.27
9.54
2.31
3.05

37.17
6.34
48.13
12.66
15.25
-13.26
2.31
0.61

11.25
8.76
44.68
-25.68
4.53
0.50
13.06
11.87

-5.68
-12.37
-23.04
-1.37
-3.10
-2.14
6.72
5.97

162.14
54.86
25.41
68.75
44.14
-3.41
9.69
8.66

-45.05
-50.47
-1.91
-31.48
-14.41
0.67
1.64
1.58

23

Table 4: Gross Fixed Capital Formation Deflators by Industry (1982 = 1.0)

INDUSTRY
Traditional Economy
Ownership of Dwellings
Monetary Economy
Enterprises & Non-Profit Institutions
Agriculture
Forestry
Fishing
Mining & Quarrying
Manufacturing
Electricity & Water
Building & Construction
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
TOTAL
Producers of Government Services
Public Administration
Defence
Education
Health
Agricultural Services
Other Services
TOTAL
Traditional Economy
Monetary Economy
GRAND TOTAL

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

0.264

0.292

0.363

0.406

0.473

0.526

0.576

0.662

0.802

0.873

1.000

1.119

1.196

1.361

1.445

1.671

1.822

2.030

0.262
0.260
na
0.214
0.203
0.272
0.207
0.215
0.258
0.220
0.261
0.222
0.234

0.271
0.284
na
0.253
0.230
0.329
0.225
0.229
0.279
0.231
0.287
0.249
0.258

0.338
0.359
na
0.308
0.313
0.392
0.286
0.282
0.347
0.337
0.359
0.327
0.332

0.377
0.455
na
0.319
0.337
0.470
0.335
0.335
0.438
0.392
0.402
0.404
0.390

0.486
0.531
na
0.433
0.446
0.520
0.434
0.437
0.525
0.464
0.470
0.477
0.480

0.524
0.591
na
0.505
0.503
0.594
0.504
0.513
0.571
0.513
0.524
0.538
0.537

0.596
0.670
na
0.555
0.566
0.651
0.565
0.575
0.649
0.583
0.592
0.600
0.603

0.682
0.775
na
0.624
0.643
0.749
0.630
0.644
0.756
0.657
0.660
0.643
0.682

0.762
0.844
na
0.665
0.699
0.827
0.694
0.716
0.804
0.804
0.800
0.746
0.760

0.856
0.904
na
0.806
0.824
0.861
0.819
0.386
1.111
0.885
0.872
0.843
0.853

1.000
1.000
na
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000

1.228
1.200
na
1.422
1.379
1.155
1.419
1.233
1.323
1.165
1.127
1.283
1.281

1.449
1.316
na
1.459
1.452
1.370
1.455
1.384
1.424
1.297
1.201
1.357
1.392

1.489
1.500
na
1.569
1.561
1.491
1.551
1.425
1.540
1.467
1.366
1.452
1.496

1.666
1.652
na
1.931
1.924
1.622
1.863
1.747
1.996
1.776
1.450
1.668
1.799

1.807
1.722
na
1.893
1.917
1.743
1.887
1.862
2.030
1.821
1.621
1.732
1.865

1.889
2.128
na
1.877
1.944
1.882
1.901
1.915
2.251
1.851
2.502
1.832
2.032

2.155
2.160
na
2.286
2.301
2.072
2.295
2.267
2.403
2.104
2.034
2.103
2.244

0.256
na
0.232
0.256
0.248
0.284
0.269
0.264
0.241
0.242

0.289
na
0.261
0.279
0.296
0.335
0.312
0.292
0.268
0.270

0.372
na
0.360
0.367
0.377
0.403
0.388
0.363
0.342
0.343

0.427
na
0.408
0.421
0.452
0.468
0.447
0.406
0.399
0.400

0.506
na
0.496
0.594
0.536
0.528
0.534
0.473
0.489
0.488

0.556
na
0.529
0.553
0.563
0.578
0.563
0.526
0.541
0.540

0.619
na
0.596
0.788
0.612
0.655
0.651
0.576
0.610
0.608

0.695
na
0.684
0.878
0.701
0.746
0.742
0.662
0.693
0.690

0.803
na
0.764
0.709
0.793
0.822
0.794
0.802
0.767
0.769

0.871
na
0.864
0.605
0.866
0.884
0.854
0.873
0.853
0.855

1.000
na
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000

1.165
na
1.190
1.168
1.150
1.149
1.159
1.119
1.260
1.246

1.324
na
1.298
1.231
1.334
1.358
1.335
1.196
1.380
1.360

1.450
na
1.424
1.352
1.457
1.475
1.456
1.361
1.486
1.474

1.603
na
1.600
1.504
1.541
1.605
1.592
1.445
1.752
1.726

1.739
2.000
1.712
1.678
1.689
1.716
1.719
1.614
1.835
1.818

1.932
2.500
1.824
1.847
1.956
1.887
1.880
1.822
1.991
1.979

2.178
0.250
2.060
2.149
2.186
2.075
2.118
2.030
2.215
2.202

24

Table 5: Capital Formation: Analysis by Industry and Type of Asset, 1989 (millions of Kenyan pounds)
SECTOR
Traditional Economy
Ownership of Dwellings
Monetary Economy
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Fishing
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
SUB-TOTAL
Government Services
Total Monetary Economy
TOTAL GDP
PERCENT
Traditional Economy
Ownership of Dwellings
Monetary Economy
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Fishing
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
SUB-TOTAL
Government Services
Total Monetary Economy
TOTAL GDP

Residential
Buildings

Non-Residential
Buildings

Construction and
Works

Land Improvement and Plantation

Development

Transport
Equipment

Machinery and Other

Equipment

Breeding Stock and

Dairy Cattle

109.49

109.49

4.97
0.20

12.90
0.51

7.71
1.89
11.93
2.90
15.62
29.13

14.17
0.61
98.47
2.17
4.18
0.02

122.43
231.92

81.36
155.71
93.30
249.01
249.01

0.10
133.13
150.77
283.90
283.90

100.00

0.00

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
98.75
0.00
10.21
0.00
7.90
13.98

12.48

10.68
0.26

71.93
0.12

0.05
32.99
5.31
4.00
3.44
127.00
7.00

12.48
12.48

0.37
191.10
43.26
234.36
234.36

10.11
198.99
77.42
6.72
17.50
134.00
18.35
1.55
42.46
579.15
62.48
641.63
641.63

0.00

0.00

0.00

4.20
18.35

10.90
46.79

10.54
0.00

0.00
3.04
2.22
9.85
11.15
5.56
53.45
0.00
65.46
12.98
26.67
16.07
15.01

0.00
5.58
0.72
81.30
8.34
1.49
0.04
0.00
0.08
11.10
43.10
18.33
17.12

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.04
0.00
0.81
0.75

12.48

25

5.42

118.38
1.09

5.42
5.42

10.16
253.86
85.23
121.12
26.01
280.80
54.50
123.98
124.29
1199.42
349.81
1549.23
1658.72

0.00

0.00

100.00

9.02
23.85

60.76
11.01

4.58
0.00

100.00
100.00

0.49
13.00
6.23
3.30
13.23
45.23
12.84
0.00
0.30
15.93
12.37
15.13
14.13

99.51
78.39
90.84
5.55
67.28
47.72
33.67
1.25
34.16
48.29
17.86
41.42
38.68

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.45
0.00
0.35
0.33

100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00

122.43
122.43

Total

5.42

Table 6: Gross Domestic Product at Current Prices (millions of Kenyan pounds)

SECTOR

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

TRADITIONAL ECONOMY
Forestry

4.83

5.21

5.57

7.30

9.40

10.77

13.30

15.21

16.66

19.22

21.71

25.28

28.36

33.58

37.26

43.68

52.60

59.27

Fishing

0.15

0.16

0.18

0.20

0.29

0.29

0.43

0.46

0.55

0.82

1.03

1.11

1.25

1.46

1.80

1.85

2.11

2.85

10.78

12.91

14.79

19.35

21.86

25.99

31.01

37.19

41.57

46.20

48.96

60.02

62.65

76.34

71.77

77.07

84.17

90.42

5.00

5.16

5.28

6.78

8.90

11.11

12.66

14.04

15.10

17.12

19.29

21.77

24.89

28.09

31.57

35.78

40.73

47.06

12.98
33.74

15.76
39.20

18.81
44.63

25.39
59.02

29.36
69.81

35.68
83.84

43.15
100.55

52.06
118.96

57.79
131.67

67.41
150.77

73.59
164.58

91.21
199.39

99.34
216.49

107.46
246.93

121.41
263.81

139.00
297.38

162.29
341.90

189.43
389.03

Building & Construction

Water Collection
Ownership of Dwellings
SUB-TOTAL
MONETARY ECONOMY
Enterprises & Non-Profit Institutions
Agriculture

190.45

220.22

261.46

357.19

480.01

689.02

653.52

671.17

711.87

819.06

938.46

1126.53

1244.34

1357.17

1598.05

1669.26

1902.69

2088.39

Forestry

3.55

4.27

5.42

5.93

6.24

6.89

8.25

12.88

15.66

18.59

32.81

25.84

27.99

32.39

37.91

49.57

61.60

93.42

Fishing

1.26

1.34

1.45

1.65

2.36

2.33

3.52

3.70

4.37

6.56

8.33

9.02

10.34

12.09

15.09

17.50

20.09

27.39

Mining & Quarrying

2.22

3.20

3.20

3.42

3.41

4.17

4.41

5.04

5.73

5.91

6.61

7.37

8.51

9.97

11.45

13.27

13.69

18.62

Manufacturing

77.93

95.62

119.42

127.00

144.18

179.94

219.32

249.84

295.14

328.16

372.32

408.26

460.96

518.40

608.23

652.47

752.96

855.36

Building & Construction

35.73

38.17

41.23

44.30

45.22

53.94

66.87

82.26

105.17

121.00

135.82

138.11

132.55

161.41

175.12

210.81

284.13

386.93

Electricity & Water

4.51

4.72

5.27

6.66

7.17

10.08

11.64

15.26

16.47

20.79

23.72

24.65

33.57

49.54

52.14

55.24

57.63

64.03

Trade, Restaurants & Hotels

66.18

71.75

97.91

114.88

132.54

164.63

189.34

214.07

244.66

274.03

306.67

371.03

439.67

520.64

561.01

628.25

712.03

829.07

Transport, Storage & Comm.

38.21

44.16

53.73

60.25

69.15

78.62

100.84

114.65

127.81

143.39

176.95

195.26

235.86

296.40

341.08

393.35

433.74

485.79

Finance, Real Estate & Bus.

31.73

34.76

47.00

54.25

66.76

82.88

97.61

117.63

135.68

168.82

209.74

248.65

269.00

314.85

365.22

418.65

501.83

576.89

Ownership of Dwellings

53.90

62.37

68.78

74.25

82.11

95.47

110.92

123.33

146.25

180.21

187.78

209.58

218.31

231.74

262.96

303.58

355.62

393.87

Other Services

21.38

25.47

27.31

30.69

35.52

40.51

46.64

52.08

64.99

73.86

82.45

95.21

107.27

129.58

153.72

181.66

197.92

228.00

Imputed Bank Service Chg.

SUB-TOTAL

-12.94
514.11

-16.99
589.06

-20.65
711.53

-22.60
857.87

-26.55
1048.12

-37.40
1371.08

-47.70
1465.18

-56.10
1605.81

-62.86
1810.94

-71.21
2089.17

-87.29
2394.37

-114.51
2745.00

-120.18
3068.19

-130.64
3503.54

-150.24
4031.74

-172.98
4420.63

-245.95
5047.98

-281.62
5766.14

PRIVATE HOUSEHOLDS
GOVERNMENT SERVICES

5.12
110.56
629.79

6.12
120.59
715.77

7.27
136.91
855.71

8.86
162.07
1028.80

10.93
184.70
1243.75

13.44
215.40
1599.92

17.06
250.66
1732.90

19.16
289.26
1914.23

23.34
332.46
2166.74

28.62
390.93
2508.72

32.75
441.35
2868.47

35.71
475.25
3255.96

44.88
522.22
3635.29

51.78
616.34
4171.66

62.96
756.45
4851.15

71.78
822.72
5315.13

83.94
917.29
6049.21

97.49
1077.84
6941.47

663.53

754.97

900.34

1087.82

1313.56

1683.76

1833.45

2033.19

2298.41

2659.49

3033.05

3455.35

3851.78

4418.59

5114.96

5612.51

6391.11

7330.50

TOTAL MONETARY ECONOMY

TOTAL GDP

26

Table 7: Gross Domestic Product at Constant 1982 Prices (millions of Kenyan pounds)
SECTOR

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

TRADITIONAL ECONOMY
Forestry

15.68

16.20

16.73

17.32

17.88

18.78

19.09

19.61

20.31

21.01

21.71

22.48

23.21

26.86

27.72

28.62

29.53

30.46

Fishing

0.48

0.41

0.37

0.39

0.45

0.61

0.70

0.72

0.74

0.82

1.03

1.19

1.29

1.66

1.45

1.50

1.53

1.54

Building & Construction

37.09

38.49

38.91

39.71

40.38

42.39

43.52

45.37

48.05

48.02

48.96

50.58

54.01

70.60

65.33

67.65

68.24

71.50

Water Collection

16.00

16.25

16.49

16.79

17.01

17.98

18.27

18.41

18.71

19.00

19.29

19.58

20.34

20.66

21.13

21.72

22.56

23.44

48.85
118.10

50.97
122.32

53.17
125.67

55.43
129.64

57.78
133.50

60.20
139.96

62.70
144.28

65.28
149.39

67.98
155.79

70.74
159.59

73.59
164.58

76.52
170.35

79.55
178.40

82.65
202.43

86.07
201.70

89.33
208.82

92.89
214.75

96.41
223.35

Ownership of Dwellings
SUB-TOTAL
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture

640.01

668.15

666.56

697.46

722.98

791.81

840.60

838.00

845.87

897.26

938.46

979.07

941.05

975.59

1023.39

1062.57

1109.26

1152.51

Forestry

11.40

13.26

15.12

13.85

14.69

16.10

17.18

20.88

21.37

21.97

32.81

23.67

24.84

26.75

29.37

33.64

38.14

40.62

Fishing

3.94

3.20

2.87

3.05

3.47

4.78

5.48

5.75

6.18

6.40

8.33

8.85

8.05

9.43

9.59

10.93

12.27

12.83

Mining & Quarrying

6.47

6.91

7.53

7.08

6.43

6.62

7.63

7.95

8.75

5.45

6.61

6.69

7.41

8.11

8.40

9.12

10.15

10.62

Manufacturing

165.68

189.51

200.68

208.71

237.91

275.89

310.51

333.97

351.47

364.13

372.32

389.07

405.84

424.07

448.67

474.34

502.80

532.47

Building & Construction

108.28

107.97

97.55

93.93

89.47

97.67

109.96

118.29

126.61

136.73

135.82

114.54

105.72

108.07

112.06

116.68

121.68

128.25

Electricity & Water

10.70

11.42

12.55

13.96

15.69

16.63

19.53

21.76

21.31

24.58

23.72

25.07

26.21

29.03

31.22

33.61

36.47

39.53

Trade, Restaurants & Hotels

250.05

245.46

260.67

243.77

243.13

261.14

291.07

303.33

318.38

322.52

306.67

315.26

332.60

355.22

389.98

412.53

436.27

455.47

Transport, Storage & Comm.

99.53

107.32

109.60

107.09

114.62

124.02

132.72

140.87

148.85

151.71

176.95

201.51

202.29

206.54

215.42

224.90

234.02

241.06

Finance, Real Estate & Bus.

84.41

85.45

99.58

105.44

112.58

117.88

139.88

170.13

169.24

221.34

209.74

226.04

222.50

244.51

261.02

274.52

291.27

313.11

121.98

124.97

128.28

134.49

137.39

143.23

148.06

157.71

165.69

181.31

187.78

187.92

187.98

190.34

196.53

205.63

212.20

220.63

Other Services

49.63

50.71

53.20

54.17

55.81

59.55

58.72

68.20

74.97

78.03

82.45

86.26

94.20

99.10

104.05

111.74

119.72

127.86

Imputed Bank Service Chg.

-34.42

-41.76

-43.75

-43.93

-44.77

-53.19

-67.14

-81.14

-78.41

-93.36

-87.29

-104.10

-99.40

-102.97

-105.94

-113.43

-121.81

-129.12

SUB-TOTAL

1517.66

1572.57

1610.44

1639.07

1709.41

1862.12

2014.20

2105.70

2180.28

2318.06

2394.37

2459.85

2459.29

2573.79

2723.76

2856.78

3002.44

3145.84

PRIVATE HOUSEHOLDS
GOVERNMENT SERVICES

9.62
246.36
1773.64

10.72
261.99
1845.28

12.16
279.90
1902.50

13.99
303.83
1956.89

16.08
319.45
2044.94

17.68
335.60
2215.40

20.42
357.05
2391.67

24.06
382.39
2512.15

28.33
403.84
2612.45

30.69
425.20
2773.95

32.75
441.35
2868.47

34.88
459.89
2954.62

37.16
473.13
2969.58

39.80
497.26
3110.85

44.00
528.73
3296.49

48.71
554.13
3459.62

55.30
586.16
3643.90

62.36
618.40
3826.60

1891.74

1967.60

2028.17

2086.53

2178.44

2355.36

2535.95

2661.54

2768.24

2933.54

3033.05

3124.97

3147.98

3313.28

3498.19

3668.44

3858.65

4049.95

Ownership of Dwellings

TOTAL MONETARY ECONOMY

TOTAL GDP

27

Table 8: Gross Domestic Product at Constant 1982 Prices: Growth Rates (%)
SECTOR

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

TRADITIONAL ECONOMY
Forestry

3.32

3.27

3.53

3.23

5.03

1.65

2.72

3.57

3.45

3.33

3.55

3.25

15.73

3.20

3.25

3.18

3.15

-14.58

-9.76

5.41

15.38

35.56

14.75

2.86

2.78

10.81

25.61

15.53

8.40

28.68

-12.65

3.45

2.00

0.65

Building & Construction

3.77

1.09

2.06

1.69

4.98

2.67

4.25

5.91

-0.06

1.96

3.31

6.78

30.72

-7.46

3.55

0.87

4.78

Water Collection

1.56

1.48

1.82

1.31

5.70

1.61

0.77

1.63

1.55

1.53

1.50

3.88

1.57

2.27

2.79

3.87

3.90

Ownership of Dwellings
SUB-TOTAL

4.34
3.57

4.32
2.74

4.25
3.16

4.24
2.98

4.19
4.84

4.15
3.09

4.11
3.54

4.14
4.28

4.06
2.44

4.03
3.13

3.98
3.51

3.96
4.73

3.90
13.47

4.14
-0.36

3.79
3.53

3.99
2.84

3.79
4.00

Fishing

MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture

4.40

-0.24

4.64

3.66

9.52

6.16

-0.31

0.94

6.07

4.59

4.33

-3.88

3.67

4.90

3.83

4.39

3.90

Forestry

16.32

14.03

-8.40

6.06

9.60

6.71

21.54

2.35

2.81

49.34

-27.86

4.94

7.69

9.79

14.54

13.38

6.50

Fishing

-18.78

-10.31

6.27

13.77

37.75

14.64

4.93

7.48

3.56

30.16

6.24

-9.04

17.14

1.70

13.97

12.26

4.56

6.80

8.97

-5.98

-9.18

2.95

15.26

4.19

10.06

-37.71

21.28

1.21

10.76

9.45

3.58

8.57

11.29

4.63

Manufacturing

14.38

5.89

4.00

13.99

15.96

12.55

7.56

5.24

3.60

2.25

4.50

4.31

4.49

5.80

5.72

6.00

5.90

Building & Construction

-0.29

-9.65

-3.71

-4.75

9.17

12.58

7.58

7.03

7.99

-0.67

-15.67

-7.70

2.22

3.69

4.12

4.29

5.40

6.73

9.89

11.24

12.39

5.99

17.44

11.42

-2.07

15.34

-3.50

5.69

4.55

10.76

7.54

7.66

8.51

8.39

Trade, Restaurants & Hotels

-1.84

6.20

-6.48

-0.26

7.41

11.46

4.21

4.96

1.30

-4.91

2.80

5.50

6.80

9.79

5.78

5.75

4.40

Transport, Storage & Comm.

7.83

2.12

-2.29

7.03

8.20

7.01

6.14

5.66

1.92

16.64

13.88

0.39

2.10

4.30

4.40

4.06

3.01

Finance, Real Estate & Bus.

1.23

16.54

5.88

6.77

4.71

18.66

21.63

-0.52

30.78

-5.24

7.77

-1.57

9.89

6.75

5.17

6.10

7.50

Ownership of Dwellings

2.45

2.65

4.84

2.16

4.25

3.37

6.52

5.06

9.42

3.57

0.07

0.03

1.26

3.25

4.63

3.20

3.97

Other Services

2.17

4.90

1.83

3.04

6.69

-1.39

16.15

9.91

4.09

5.66

4.62

9.20

5.20

4.99

7.39

7.14

6.80

SUB-TOTAL

3.62

2.41

1.78

4.29

8.93

8.17

4.54

3.54

6.32

3.29

2.73

-0.02

4.66

5.83

4.88

5.10

4.78

11.43

13.43

15.05

14.94

9.95

15.50

17.83

17.75

8.33

6.71

6.50

6.54

7.10

10.55

10.70

13.53

12.77

GOVERNMENT SERVICES

6.34

6.84

8.55

5.14

5.06

6.39

7.10

5.61

5.29

3.80

4.20

2.88

5.10

6.33

4.80

5.78

5.50

TOTAL MONETARY ECONOMY

TOTAL GDP
TOTAL GDP

4.04
4.01

3.10
3.08

2.86
2.88

4.50
4.41

8.34
8.12

7.96
7.67

5.04
4.95

3.99
4.01

6.18
5.97

3.41
3.39

3.00
3.03

0.51
0.74

4.76
5.25

5.97
5.58

4.95
4.87

5.33
5.19

5.01
4.96

Mining & Quarrying

Electricity & Water

PRIVATE HOUSEHOLDS

28

Table 9: Implicit Gross Domestic Product Deflators (1982=1.00)

SECTOR
TRADITIONAL ECONOMY
Forestry
Fishing
Building & Construction
Water Collection
Ownership of Dwellings
SUB-TOTAL
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Fishing
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
Imputed Bank Service Chg.
SUB-TOTAL
PRIVATE HOUSEHOLDS
GOVERNMENT SERVICES
TOTAL MONETARY ECONOMY
TOTAL GDP

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

0.308
0.313
0.291
0.313
0.266
0.286

0.322
0.390
0.335
0.318
0.309
0.320

0.333
0.486
0.380
0.320
0.354
0.355

0.421
0.513
0.487
0.404
0.458
0.455

0.526
0.644
0.541
0.523
0.508
0.523

0.573
0.475
0.613
0.618
0.593
0.599

0.697
0.614
0.713
0.693
0.688
0.697

0.776
0.639
0.820
0.763
0.797
0.796

0.820
0.743
0.865
0.807
0.850
0.845

0.915
1.000
0.962
0.901
0.953
0.945

1.000
1.000
1.000
1.000
1.000
1.000

1.125
0.933
1.187
1.112
1.192
1.170

1.222
0.969
1.160
1.224
1.249
1.214

1.250
0.880
1.081
1.360
1.300
1.220

1.344
1.241
1.099
1.494
1.411
1.308

1.526
1.233
1.139
1.647
1.556
1.424

1.781
1.379
1.233
1.805
1.747
1.592

1.946
1.851
1.265
2.008
1.965
1.742

0.298
0.311
0.320
0.343
0.470
0.330
0.421
0.265
0.384
0.376
0.442
0.431
0.376
0.339
0.532
0.449
0.355
0.351

0.330
0.322
0.419
0.463
0.505
0.354
0.413
0.292
0.411
0.407
0.499
0.502
0.407
0.375
0.571
0.460
0.388
0.384

0.392
0.358
0.505
0.425
0.595
0.423
0.420
0.376
0.490
0.472
0.536
0.513
0.472
0.442
0.598
0.489
0.450
0.444

0.512
0.428
0.541
0.483
0.608
0.472
0.477
0.471
0.563
0.515
0.552
0.567
0.514
0.523
0.633
0.533
0.526
0.521

0.664
0.425
0.680
0.530
0.606
0.505
0.457
0.545
0.603
0.593
0.598
0.636
0.593
0.613
0.680
0.578
0.608
0.603

0.870
0.428
0.487
0.630
0.652
0.552
0.606
0.630
0.634
0.703
0.667
0.680
0.703
0.736
0.760
0.642
0.722
0.715

0.777
0.480
0.642
0.578
0.706
0.608
0.596
0.650
0.760
0.698
0.749
0.794
0.710
0.727
0.835
0.702
0.725
0.723

0.801
0.617
0.643
0.634
0.748
0.695
0.701
0.706
0.814
0.691
0.782
0.764
0.691
0.763
0.796
0.756
0.762
0.764

0.842
0.733
0.707
0.655
0.840
0.831
0.773
0.768
0.859
0.802
0.883
0.867
0.802
0.831
0.824
0.823
0.829
0.830

0.913
0.846
1.025
1.084
0.901
0.885
0.846
0.850
0.945
0.763
0.994
0.947
0.763
0.901
0.933
0.919
0.904
0.907

1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000

1.151
1.092
1.019
1.102
1.049
1.206
0.983
1.177
0.969
1.100
1.115
1.104
1.100
1.116
1.024
1.033
1.102
1.106

1.322
1.127
1.284
1.148
1.136
1.254
1.281
1.322
1.166
1.209
1.161
1.139
1.209
1.248
1.208
1.104
1.224
1.224

1.391
1.211
1.282
1.229
1.222
1.494
1.707
1.466
1.435
1.288
1.218
1.308
1.269
1.361
1.301
1.239
1.341
1.334

1.562
1.291
1.574
1.363
1.356
1.563
1.670
1.439
1.583
1.399
1.338
1.477
1.418
1.480
1.431
1.431
1.472
1.462

1.571
1.474
1.601
1.455
1.376
1.807
1.644
1.523
1.749
1.525
1.476
1.626
1.525
1.547
1.474
1.485
1.536
1.530

1.715
1.615
1.637
1.349
1.498
2.335
1.580
1.632
1.853
1.723
1.676
1.653
2.019
1.681
1.518
1.565
1.660
1.656

1.812
2.300
2.135
1.753
1.606
3.017
1.620
1.820
2.015
1.842
1.785
1.783
2.181
1.833
1.563
1.743
1.814
1.810

29

Table 10: GROSS SECTORAL ICORS (WITH ONE YEAR LAG)

SECTOR
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water

1972

1973

1974

1.80

-29.09

1975

1.93

1976

2.34

1977

1978

0.75

1.68

1979

1980

-33.06

7.83

1981

1982

1.20

1.56

1983

1984

1985

1.26

-1.15

1.17

1986

1987

1988

1.06

1.37

1.26

1989

1.39

0.54

0.47

-0.50

0.39

0.45

1.06

0.29

1.82

2.03

0.08

-0.07

0.17

0.20

0.15

0.05

0.04

0.31

18.05

9.29

-26.00

-7.38

19.68

3.80

27.88

8.21

-2.29

5.19

50.63

4.97

6.97

10.72

5.06

6.53

11.57
3.79

5.83

12.39

11.89

3.17

2.72

3.63

6.30

7.87

8.70

13.39

4.00

4.83

3.60

2.65

3.27

3.15

-132.42

-3.90

-6.77

-5.23

2.73

2.50

6.86

4.90

4.76

-44.13

-1.36

-4.74

19.96

5.09

5.85

7.44

5.64

43.46

32.73

18.13

21.12

67.76

19.57

27.69

-94.87

15.25

-88.38

55.72

43.45

9.58

13.26

12.52

12.48

14.18

Trade, Restaurants & Hotels

-8.30

2.54

-2.14

-67.39

2.62

1.39

2.87

1.79

9.54

-3.22

2.54

1.24

0.79

0.70

0.63

0.56

0.99

Transport, Storage & Comm.

11.18

44.03

-40.69

15.28

10.22

15.98

20.90

16.85

44.70

4.05

4.13

106.76

24.78

12.00

15.28

16.57

16.99

Finance, Real Estate & Bus.

9.26

0.63

2.03

1.70

1.41

0.39

0.43

-14.11

0.24

-2.3

10.58

-4.05

0.65

0.79

0.56

0.71

0.95

Ownership of Dwellings

24.66

17.01

8.89

19.75

6.25

9.14

6.76

10.46

5.04

12.43

516.71

705.00

20.11

6.59

6.89

9.82

5.49

Other Services

31.67

14.40

26.77

10.78

6.53

-38.72

3.57

7.31

18.04

14.38

14.51

5.96

8.95

11.13

5.92

6.21

7.11

SUB-TOTAL

9.35

13.44

15.68

6.58

2.99

3.72

7.43

8.01

4.30

8.13

7.44

-765.36

3.61

2.72

3.56

3.56

3.65

Producers of Government Services

TOTAL GDP

7.87
8.92

6.34
11.00

4.17
10.12

5.93
6.58

5.76
3.38

4.89
4.00

4.44
6.77

6.09
7.38

7.50
4.88

10.48
8.52

6.83
7.27

6.65
25.03

4.75
3.59

4.20
3.23

5.44
3.92

4.18
3.72

5.98
4.02

Note: Derived with one year lag, thus ICORt= It-1/(Yt Yt-1)

30

Table 11: GROSS SECTORAL ICORS (WITH THREE YEAR MOVING AVERAGE)
SECTOR
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry

1972

1973

1974

1975

2.73

1976

3.03

1977

1.36

1978

1.35

1979

1980

1.91

4.24

1981

3.69

1982

1.87

1983

1984

1985

1986

1987

1988

1989

1.33

3.63

3.65

3.05

1.19

1.22

1.34

1.03

1.29

1.64

0.64

0.47

0.59

0.67

0.25

1.19

0.60

-0.21

0.17

0.11

0.07

0.11

41.64

-46.38

-22.24

22.51

10.86

9.08

-10.57

-15.03

-8.55

6.96

8.34

6.77

6.80

6.61

7.12

8.66

6.75

3.87

3.16

3.92

5.44

7.38

9.32

7.63

6.18

4.13

3.55

3.13

3.03

3.41

Building & Construction

-7.40

-4.78

585.00

4.77

3.83

4.45

5.45

7.36

-9.71

-3.57

-4.24

-43.96

8.59

6.21

6.26

Electricity & Water

28.79

23.21

30.83

28.18

30.01

34.44

30.56

86.01

53.49

123.17

28.58

17.17

11.62

12.72

13.12

Trade, Restaurants & Hotels

-17.96

-50.58

269.00

2.79

2.06

1.81

3.23

35.16

-36.00

9.35

1.26

0.85

0.70

0.64

0.71

Transport, Storage & Comm.

38.31

43.50

21.72

13.66

15.44

17.87

22.78

10.10

6.29

5.67

9.80

21.22

15.78

14.65

16.21

Mining & Quarrying

Manufacturing

Finance, Real Estate & Bus.

1.44

1.21

1.72

0.82

0.50

0.67

0.47

1.31

0.86

43.53

1.09

1.19

0.67

0.69

0.77

Ownership of Dwellings

14.81

13.60

9.97

10.17

7.18

8.59

6.84

8.07

10.41

29.23

63.32

15.16

8.55

7.68

7.20

Other Services

21.16

15.59

10.73

16.31

7.29

7.49

7.18

11.81

15.42

10.28

8.80

8.22

8.24

7.28

6.42

SUB-TOTAL

12.12

10.38

5.44

3.96

4.30

5.79

6.15

6.27

6.08

10.88

7.41

4.74

3.26

3.27

3.59

5.85
9.93

5.32
8.83

5.12
5.48

5.46
4.29

4.93
4.49

5.10
5.72

5.92
6.15

7.80
6.57

8.14
6.51

8.01
9.76

5.89
6.56

4.86
4.73

4.75
3.57

4.55
3.62

5.18
3.89

Producers of Government Services

TOTAL GDP

Note: Derived with three year moving average, thus ICORt= (It-1, It-3)/((Yt,Yt-2) (Yt-1,Yt-3))

31

Table 12: GROSS SECTORAL ICORS (WITH FIVE YEAR MOVING AVERAGE)
SECTOR
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry

1972

1973

1974

1975

1976

1977

1.76

1978

1979

1.74

1.98

1980

2.30

1981

1.97

1982

1983

2.42

2.34

1984

2.74

1985

1986

1987

1988

1989

2.01

1.98

1.93

1.90

1.25

0.74

0.93

0.67

0.55

0.69

0.31

0.73

0.96

0.62

0.34

2.28

0.10

0.12

226.27

41.44

78.57

16.69

-31.24

-3290.00

-35.22

-51.43

-40.75

7.34

7.67

6.34

7.41

5.16

4.59

4.24

4.25

4.95

6.54

7.28

7.03

5.97

4.60

3.56

3.39

3.29

-14.32

71.17

7.62

5.33

4.21

5.69

46.95

-15.89

-11.10

-7.22

-8.61

24.26

7.48

Electricity & Water

32.73

27.07

26.52

35.56

30.90

40.49

55.15

65.92

35.97

38.68

21.31

15.02

12.39

Trade, Restaurants & Hotels

18.32

4.53

4.77

2.60

2.40

4.27

7.21

5.49

4.12

2.02

0.94

0.75

0.72

Transport, Storage & Comm.

20.45

21.76

19.91

15.68

18.00

12.73

9.25

8.94

9.01

7.83

11.29

18.18

16.18

Mining & Quarrying

Manufacturing
Building & Construction

Finance, Real Estate & Bus.

1.49

0.90

0.75

0.84

0.50

0.80

0.86

1.45

1.03

1.96

0.90

0.94

0.74

Ownership of Dwellings

13.14

10.81

8.78

9.19

7.01

7.90

9.54

11.80

13.03

18.61

14.88

10.61

8.02

Other Services

13.93

16.99

8.94

7.57

8.78

10.23

9.35

10.42

10.99

10.19

8.43

7.21

7.48

SUB-TOTAL

6.94

5.53

5.28

5.10

4.75

5.74

6.68

7.71

6.46

5.82

4.78

4.13

3.40

Producers of Government Services

TOTAL GDP

5.85
6.77

5.30
5.60

4.90
5.32

5.34
5.23

5.68
4.99

6.40
5.93

6.80
6.72

7.44
7.58

7.05
6.41

6.09
5.81

5.32
4.88

4.81
4.28

4.90
3.70

Note: Derived with five year moving average, thus ICORt= (It-1, It-6)/((Yt,Yt-5) - (Yt-1,Yt-6))

32

Table 13: NET SECTORAL ICORS (WITH ONE YEAR LAG)

SECTOR
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
Producers of Government Services
TOTAL GDP (d=0.02)
TOTAL GDP (d=0.05)
Total GDP (weighted depreciation rate)

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1.23
0.48
10.40
4.32
8.04
33.50
4.81
6.82
3.53
13.58
16.49
5.99
5.95
3.97
5.07

3.94
0.41
5.97
6.70
-8.10
27.23
1.41
13.13
0.56
9.69
10.23
4.91
6.67
4.19
5.53

1.35
-0.66
-159.18
5.29
19.48
15.39
-9.33
34.38
1.52
6.29
12.79
3.38
5.97
3.70
4.92

1.52
0.30
-16.22
2.34
98.56
18.19
3.73
8.93
1.31
10.26
6.50
4.27
4.53
3.08
3.89

0.62
0.38
7.31
2.07
1.77
50.80
1.56
6.35
0.99
4.25
5.03
4.13
2.71
2.09
2.46

1.27
0.82
2.86
2.60
1.79
17.55
0.97
9.33
0.35
5.74
88.58
3.72
3.18
2.42
2.87

6.04
0.27
12.72
3.79
4.13
23.56
1.31
11.52
0.39
5.17
3.18
3.46
4.82
3.37
4.19

2.50
0.98
5.49
4.03
2.86
-2884.46
0.89
8.95
5.00
7.50
6.08
4.49
4.92
3.28
4.20

0.91
1.19
-2.64
3.64
2.93
13.49
1.97
12.41
0.23
4.16
12.11
5.44
3.66
2.66
3.24

1.08
0.07
4.20
4.15
6.78
-206.32
184.89
3.11
-3.73
7.96
10.63
6.87
5.36
3.44
4.49

0.86
-0.08
9.87
1.90
-1.99
41.23
0.91
3.04
0.46
18.57
10.13
4.63
4.38
2.74
3.63

-2.38
0.12
3.39
2.24
-13.52
30.18
0.65
7.67
14.60
11.08
4.89
3.92
6.74
3.21
4.88

Note: Derived with one year lag, thus ICORt= It-1/(Yt-(1-d)Yt-1)

33

1985

1986

1987

1988

1989

0.76
0.16
4.56
1.70
6.14
8.08
0.46
7.33
0.54
7.76
6.47
3.41
2.60
1.84
2.27

0.76
0.13
4.47
1.42
2.16
10.49
0.46
5.55
0.61
4.08
7.95
3.19
2.38
1.70
2.09

0.90
0.05
3.19
1.74
2.64
9.93
0.34
7.15
0.40
4.81
4.66
3.84
2.78
1.94
2.41

0.87
0.03
4.53
1.72
3.43
10.10
0.30
7.42
0.53
6.04
4.85
3.10
2.69
1.89
2.35

0.92
0.24
5.57
2.05
2.93
11.45
0.46
6.38
0.75
3.65
5.49
4.39
2.87
2.00
2.49

0.02
0.02
0.05
0.05
0.05
0.02
0.05
0.05
0.02
0.02
0.02
0.02
0.02
0.05
0.0304

Table 14: NET SECTORAL ICORS (THREE-YEAR MOVING AVERAGE)

SECTOR
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
Producers of Government Services
TOTAL GDP (d=0.02)
TOTAL GDP (d=0.05)
Total GDP (weighted depreciation rate)

1975

1.71
0.57
13.45
4.61
66.04
25.07
3.74
13.58
1.24
8.44
10.46
4.18
5.96
3.81
4.98

1976

1.79
0.71
33.96
3.72
-19.90
25.02
3.60
13.33
0.96
7.39
8.25
3.84
5.40
3.48
4.53

1977

1.16
1.14
87.18
2.99
5.40
31.88
3.49
11.30
1.14
6.02
7.72
3.94
4.25
3.00
3.71

1978

1.17
0.68
10.60
2.73
3.66
28.05
1.47
9.45
0.71
6.67
11.38
4.29
3.73
2.78
3.34

1979

1.42
0.44
7.57
3.00
2.95
22.68
1.04
9.90
0.53
6.68
7.27
4.18
3.78
2.82
3.38

1980

2.02
0.50
7.11
3.25
3.23
26.43
1.02
9.68
0.64
7.23
7.24
4.49
4.34
3.09
3.80

1981

1.75
0.49
-20.90
3.46
2.90
26.75
1.52
9.08
0.57
5.68
7.21
5.05
4.39
3.07
3.82

1982

1.16
0.21
-75.78
3.16
3.20
60.70
2.22
5.70
0.96
5.76
9.33
5.48
4.31
2.94
3.71

1983

0.85
0.45
-13.39
2.80
14.05
38.97
2.13
3.75
0.73
5.92
10.38
4.71
3.94
2.64
3.36

Note: Derived with three year moving average, thus ICORt= (It-1, It-3)/((Yt,Yt-2) - (1-d)(Yt-1,Yt-3))

34

1984

1.35
0.28
4.32
2.18
-10.09
49.00
1.07
3.76
2.65
9.10
6.94
4.42
4.64
2.75
3.74

1985

1.43
-0.22
4.56
1.92
-10.96
15.51
0.66
5.03
0.87
9.44
6.68
4.01
3.79
2.37
3.14

1986

1.42
0.14
4.12
1.78
6.76
11.09
0.45
8.03
0.71
7.57
6.18
3.95
3.29
2.18
2.80

1987

0.91
0.08
4.64
1.80
3.10
10.37
0.39
7.48
0.49
5.76
6.39
3.64
2.74
1.94
2.40

1988

0.89
0.09
4.76
1.96
3.33
11.70
0.34
6.95
0.64
5.15
5.68
3.86
2.84
2.01
2.48

1989

0.86
0.11
4.52
2.00
3.05
13.46
0.37
7.01
0.80
4.73
5.79
4.00
2.92
2.05
2.55

0.02
0.02
0.05
0.05
0.05
0.02
0.05
0.05
0.02
0.02
0.02
0.02
0.02
0.05
0.0304

Table 15: NET SECTORAL ICORS (WITH FIVE YEAR MOVING AVERAGE)
SECTOR
MONETARY ECONOMY
Enterprises & Non-Profit Institutions:
Agriculture
Forestry
Mining & Quarrying
Manufacturing
Building & Construction
Electricity & Water
Trade, Restaurants & Hotels
Transport, Storage & Comm.
Finance, Real Estate & Bus.
Ownership of Dwellings
Other Services
Producers of Government Services
TOTAL GDP (d=0.02)
TOTAL GDP (d=0.05)
Total GDP (weighted depreciation rate)

1977

1.22
0.58
18.14
3.55
10.66
26.89
2.77
9.74
1.16
8.16
9.10
4.44
4.73
3.20
4.06

1978

1.23
0.68
12.19
3.14
5.38
23.07
1.91
10.32
0.75
6.84
10.09
4.03
4.01
2.84
3.51

1979

1.38
0.53
15.11
2.90
3.50
22.67
1.89
10.26
0.65
5.98
6.50
3.74
3.89
2.79
3.42

1980

1.51
0.45
8.07
2.88
3.00
28.72
1.37
9.01
0.70
6.29
5.89
3.98
3.80
2.74
3.35

1981

1982

1.34
0.55
34.44
3.10
2.68
25.47
1.27
9.52
0.44
5.22
6.83
4.24
3.59
2.62
3.18

1.54
0.28
18.18
3.54
3.21
31.32
1.62
7.67
0.68
5.82
7.89
4.71
4.12
2.89
3.59

1983

1.44
0.54
37.65
3.46
5.98
39.38
1.72
5.98
0.71
6.71
7.40
4.89
4.47
2.99
3.81

1984

1.46
0.60
22.53
3.11
10.50
43.27
1.49
5.36
1.05
7.46
8.02
5.07
4.68
2.94
3.88

Note: Derived with five year moving average, thus ICORt= (It-1, It-6)/((Yt,Yt-5 - (1-d)(Yt-1,Yt-6))

35

1985

1.18
0.42
23.59
2.60
16.56
27.39
1.30
5.11
0.80
7.49
8.18
4.79
4.04
2.58
3.38

1986

1.13
0.25
4.64
2.13
33.13
27.88
0.91
4.51
1.25
8.35
7.61
4.22
3.63
2.32
3.04

1987

1.08
0.53
4.41
1.78
17.05
16.73
0.52
5.52
0.67
7.20
6.40
3.73
3.09
2.02
2.61

1988

1.08
0.08
4.03
1.75
4.95
11.97
0.43
6.95
0.68
5.90
5.56
3.44
2.79
1.88
2.39

1989

0.84
0.10
4.43
1.74
3.32
10.03
0.40
6.75
0.58
4.98
5.69
3.59
2.44
1.71
2.12

Depreciation

0.02
0.02
0.05
0.05
0.05
0.02
0.05
0.05
0.02
0.02
0.02
0.02
0.02
0.05
0.0304