Financial intermediation, real estate, public administration and education are some of the sectors that recorded notable growth in the third quarter of last year, the National Bureau of Statistics (NBS) has said.

The NBS said in the report analysing performance by sector that economic growth during the quarter has not been smooth.

It said the country’s growth slowed to 6.4 percent in the third quarter of 2011 from 6.7 percent a year earlier.

"During the period under review, there have been quite a number of challenges that had negative impacts on the economy, especially on the manufacturing and electricity activities," NBS said.

"The challenges include, power outages, escalating prices of fuel and the depreciation of the shilling against major currencies." 

Some sectors including communications, mining and construction sectors performed well. The mining sector, the biggest foreign exchange earner, rebounded to a growth of 1.5 percent in Q3, 2011, from a negative growth rate of 12.3 percent a year earlier, influenced by more production of gold as a result of favourable gold prices in the world market during the quarter, NBS said in a statement on its website.

The report said that financial intermediation recorded a growth rate of 11.5 percent compared to 10.1 percent in the same quarter of 2010.

According to the report the performance is a result of an increase in the levels of deposits, lending by commercial banks and services rendered by insurance companies.

In real estate, the report said the activity recorded a growth rate of 5.8 percent in the third quarter of 2011 compared to a growth rate of 3.8 percent in the same quarter of 2010.

The increase was due to the rise in the demand of renting services and the increase in the supply of renting facilities.

According to the report, public administration recorded a 7.1 per cent growth rate in the third quarter of 2011 compared to a growth rate of 6.7 percent in the third quarter of 2010.

The development was attributed to recruitment of new employees by the government during the reference period.

For education, the report shows a growth rate of 7.2 percent in the third quarter of 2011 compared to 7.8 percent in the corresponding quarter of 2010.

Health, other Social, Community and Personal Services , the report said  they recorded a growth rate of 5.0 percent in the third quarter of 2011 compared to a growth rate of 6.1 percent in a similar quarter of 2010.

The International Monetary Fund said in November that growth in 2011 may exceed the body's 6 percent forecast earlier, due to the strong performance of telecommunications, construction and financial services sectors.

The IMF cut the 2011 growth forecast to 6 percent from 7.2 percent, saying frequent power outages would hurt output while food and fuel prices could push inflation higher..