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Kenya’s economy in recovery after poll lull

By Reuters | Published Mon, May 7th 2018 at 00:00, Updated May 6th 2018 at 17:53 GMT +3
Workers packaging products at the new Bidco detergent plant, Bidco Africa has commissioned a new Shs. 2 billion washing powder plant at its Thika Headquarters. PHOTO:WILBERFORCE OKWIRI

Kenya’s private sector activity jumped in April, continuing its recovery after months of slowing down last year due to a prolonged and volatile election period, a survey showed on Friday.

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services rose to 56.4 in April from 55.7 in March. Anything above 50 denotes growth; anything below, contraction.

“The strength of the recovery in private sector activity continued last month. This shows that the underlying demand conditions in the economy are consistent with a solid recovery in economic activity,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank.

Output is up for the fourth month in a row as new orders rolled in from both local and foreign markets.

However, the survey cautioned on the prospect of inflation rising in coming months.

“The combination of rising demand, both domestic and external, with rising input costs and rising employment have the potential to exert meaningful and durable upward pressures on inflation,” Mr Qureishi said.

Kenya’s inflation eased to 3.73 per cent in April year-on-year from 4.18 per cent last month, the latest data from the statistics office showed. The rate is at its lowest level since January 2013.

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In October, the PMI dropped to 34.4, its lowest since the series began in January 2014, after the Opposition boycotted a repeat presidential election ordered by the Supreme Court.

 


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