Kenya’s Private Sector Growth Steady in February, Pessimistic Outlook Ahead

Kenya’s private sector remained stable in February, as the Stanbic Bank Kenya PMI slightly improved to 50.6. Growth was primarily driven by agriculture, manufacturing, and construction, while wholesale and retail, and services saw declines. Business sentiment is low, with only 5% of surveyed firms expecting increased output in the next year, despite positive forecasts from the finance ministry for future economic growth.

In February, Kenya’s private sector reported stable growth, as indicated by the Stanbic Bank Kenya Purchasing Managers’ Index (PMI), which slightly increased to 50.6 from January’s 50.5. Indices above 50.0 denote expansion in economic activities. Growth was observed particularly in agriculture, manufacturing, and construction, though sectors such as wholesale and retail, along with services, experienced declines.

Despite the overall stability, the sentiment among businesses appeared pessimistic. Only 5% of companies surveyed anticipated an increase in production over the forthcoming year, with positive outlooks mainly found in construction, wholesale, and services sectors.

The Kenyan Ministry of Finance has projected a growth rate of 5.3% for the economy in 2025 and 2026, which signifies an acceleration from an estimated growth of 4.6% the previous year. The outlook, however, remains uncertain amidst divergent sector performances.

In summary, Kenya’s private sector exhibited steady growth in February, as evidenced by a slight rise in the PMI. While certain industries are thriving, the overall business sentiment remains subdued, with low expectations for output in the upcoming year. The government forecasts a positive economic trajectory for the coming years, despite current challenges.

Original Source: money.usnews.com