Kenya’s private sector growth remained stable in February with a PMI of 50.6. Growth is driven by agriculture, manufacturing, and construction, despite declines in wholesale, retail, and services. Overall business optimism is low, with only 5% expecting a rise in output. The economy is forecasted to grow 5.3% in 2025 and 2026.
In February, Kenya’s private sector exhibited stable growth, maintaining a similar expansion rate compared to January, as evidenced by the Stanbic Bank Kenya Purchasing Managers’ Index (PMI). The PMI inched up slightly from 50.5 to 50.6, indicating ongoing activity above the neutral level of 50.0. Growth was notably driven by sectors such as agriculture, manufacturing, and construction, while wholesale, retail, and services faced downturns.
Despite the stable PMI, the overall sentiment among businesses remains pessimistic. Only a mere 5% of the surveyed firms foresee an increase in output over the following year. Positivity was limited to construction, wholesale, and retail, suggesting uncertainty in other sectors.
Looking ahead, the finance ministry projects an economic growth rate of 5.3% for 2025 and 2026, a notable acceleration from last year’s estimated expansion of 4.6%. This forecast reflects a cautiously optimistic outlook for the future economic landscape in Kenya.
The report indicates a stable private sector in Kenya, marked by slight growth in February amidst varied sector performance. While sectors like agriculture and construction show promise, overall business sentiment is negative, with forecasts suggesting improved growth in subsequent years. The data emphasizes the need for vigilance regarding sector-specific challenges and opportunities.
Original Source: money.usnews.com
