Kenya’s private sector set for recovery after political beating
Private sector activity in Kenya rose in November from a record low hit in the previous month, pointing to a potential recovery as political risks ease, survey data showed on Tuesday.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services rose to 42.8 last month, from 34.4 in October, but remained well below the 50 mark that separates an expansion from a contraction.
“Business conditions deteriorated at a slower pace, thanks in large part to the conjecture by the private sector that the political impasse is now behind us,” said Stanbic Bank economist for East Aafrica Jibran Qureishi.
Output has contracted for seven straight months, according to the PMI, but Qureishi said a recovery may be near.
“Lower political risk could provide the platform for Kenya’s private sector to stage a recovery over the near to medium term,” he said.
“Good weather conditions have improved growth prospects for the agriculture sector and reduced inflation expectations.” The government expects the economy to grow by 5.1 per cent this year having reduced its initial forecast of 5.9 per cent.