In February, Kenya’s private sector stability continued, with the PMI rising to 50.6. While sectors like agriculture and construction observed growth, optimism about future conditions is low, with only 5% of firms expecting increased output. The finance ministry forecasts 5.3% economic growth for 2025 and 2026, following a prior expansion of 4.6%.
In February, Kenya’s private sector maintained a steady performance, according to a survey from Stanbic Bank. The Purchasing Managers’ Index (PMI) slightly increased from 50.5 to 50.6, indicating continuous growth as values above 50.0 signify expansion. Growth was predominantly fueled by the agriculture, manufacturing, and construction sectors, while the wholesale, retail, and services sectors experienced a decline in activity.
Despite the stable PMI, the outlook among surveyed businesses remains pessimistic regarding future conditions. Only 5% of companies forecast an increase in output over the upcoming year, with positive sentiments observed in merely three out of the five monitored sectors: construction, wholesale, retail, and services. This hesitation reflects underlying concerns regarding economic stability and growth prospects.
The Kenyan Ministry of Finance anticipates that the economy will grow by 5.3% in both 2025 and 2026, an improvement from the estimated growth of 4.6% in the past year. This prognosis underscores a gradual recovery trajectory but highlights the cautious sentiment pervasive among private sector participants.
Overall, while the private sector showed consistency in February, the lack of confidence in future growth remains a significant concern, necessitating attention from policymakers and stakeholders alike.
In summary, the recent survey reveals that while Kenya’s private sector has shown steady growth in February, there is a prevalent sense of caution regarding future economic conditions. The slight increase in the PMI reflects some sectors’ resilience, particularly agriculture and construction, yet an overwhelming majority of businesses maintain a bleak outlook. The anticipated economic growth forecast for 2025 and 2026 suggests a potential recovery, but significant challenges persist.
Original Source: money.usnews.com
