Key facts
- Kenya's private sector activity contracted in August, falling below the 50.0 growth threshold for the first time in three months.
- The Stanbic Bank Kenya Purchasing Managers' Index decreased to 49.7 from 51.3 in July.
- Supply constraints and cost pressures led companies to reduce output and purchases.
- High raw material costs and tight cash flows limited firms' ability to translate stronger demand into output.
- Kenya's year-on-year inflation rose slightly to 6.6% in August.
Kenya's private sector activity contracted in August, marking the first decline in three months, according to a survey by Stanbic Bank. The Purchasing Managers' Index (PMI) fell to 49.7 from 51.3 in July, dropping below the 50.0 threshold that separates growth from contraction. This slowdown was attributed to supply constraints and cost pressures, which led companies to reduce output and purchases. Stanbic Bank economist Christopher Legilisho noted that high raw material costs and tight cash flows limited firms' ability to translate stronger demand into output. Kenya's year-on-year inflation increased slightly to 6.6% in August from 6.5% in July. The finance ministry projects economic growth of 5.0% for the current year, with forecasts of 5.1% in 2027 and 5.2% in 2028.