In February, Kenya’s private sector growth remained consistent, indicated by a PMI of 50.6, up from 50.5. Key sectors driving this growth included agriculture, manufacturing, and construction, although wholesale and retail, as well as services, faced declines. A mere 5% of firms expect output increases in the next 12 months. The finance ministry forecasts a 5.3% growth rate in 2025 and 2026, following an estimated 4.6% growth last year.
Kenya’s private sector maintained a steady pace in February, as indicated by the latest Purchasing Managers’ Index (PMI) report. The Stanbic Bank Kenya PMI increased slightly to 50.6 from 50.5 in January, with levels above 50.0 illustrating growth in business activities. Growth was notably observed in agriculture, manufacturing, and construction sectors, while wholesale and retail, alongside service sectors, experienced declines according to the survey results.
Despite the growth in certain sectors, a majority of participating companies expressed pessimism regarding overall business conditions. Only a mere 5% of the firms surveyed anticipate an increase in output within the upcoming 12 months. Positive expectations were limited to three of the five sectors monitored: construction, wholesale and retail, and services.
Looking ahead, the finance ministry projects a 5.3% economic growth rate for Kenya in both 2025 and 2026, a rise from an estimated growth rate of 4.6% for the previous year. This outlook suggests a gradual improvement in economic conditions, notwithstanding current challenges facing several sectors of the economy.
In conclusion, while Kenya’s private sector exhibited stability in February, the overall economic outlook seems cautious, with only a few sectors expected to see growth in the near term. The slight increase in the PMI is overshadowed by widespread pessimism among firms regarding future output. Nevertheless, the projected economic growth by the finance ministry offers a glimmer of hope for recovery in subsequent years.
Original Source: money.usnews.com
