By Ukumbi Afrika Nairobi– Kenya's private sector returned to growth in July as improving demand supported business activity, although persistent inflationary pressures and logistics bottlenecks continued to weigh on the pace of expansion.
The latest Stanbic Bank Kenya Purchasing Managers' Index (PMI) rose to 51.3 in July from 50.0 in June, signalling a modest improvement in operating conditions across the country's private sector. A PMI reading above 50.0 indicates expansion, while a reading below that level points to contraction.
Stanbic Bank economist Christopher Legilisho said the July survey showed encouraging signs of recovering demand, but warned that rising business costs and supply chain constraints remain significant headwinds.
"The July PMI suggests that demand is beginning to recover but cost pressures and logistics bottlenecks are still constraining activity, " Legilisho said.
The survey comes as Kenya maintains an optimistic medium-term economic outlook. In July, the Finance Ministry projected the economy would expand by 5.1% in 2027 and 5.2% in 2028, compared with an estimated 5.0% growth in 2026.
However, inflation remains a concern for businesses and households. Official data showed Kenya's annual inflation rate edged up to 6.5% in July from 6.4% in June, reflecting continued price pressures.
While stronger demand offers hope for sustained business recovery, economists say easing inflation and resolving logistics disruptions will be key to supporting broader economic momentum in the months ahead.
Source: Reuters
Reporting: George Obulutsa
Editing: Toby Chopra