This archive report was first published on 3 July 2020.
Kenya's private sector activity saw a slight uptick in June, with the Markit Stanbic Bank Kenya Purchasing Managers' Index (PMI) standing at 46.6, a significant improvement from May's 36.7. However, the index remains below the 50 mark, indicating a contraction in economic activity.
According to the survey, the easing of restrictions in some European countries led to an increase in demand for exports, which contributed to higher activity. The survey's compilers also noted that the relaxation of curfew measures in Kenya provided respite for businesses hit by the shorter working day.
Kenya has been under a daily curfew since March to curb the spread of the novel coronavirus. As of Thursday, the country had reported 6,673 confirmed COVID-19 cases and 149 deaths. The virus has had a devastating impact on the economy, with tourism, horticulture, transport, manufacturing, and small and medium-sized businesses being hit hardest.
Finance ministry officials expect economic growth to slow to 2.5% this year from 5.4% last year, while the International Monetary Fund forecasts a 0.3% contraction this year. The survey's compilers warned that the damage done by COVID-19 could last for the better part of the next six months, despite official growth statistics indicating otherwise.
“The rate of downturn eased considerably from May, driven by relaxed curfew measures and a recovery in sales at several businesses,” the survey's compilers said in a report.
“A resumption in cargo flights in addition to the gradual re-opening of economies around the world, is underpinning external demand,” said Jibran Qureishi, the head of research for Africa at Stanbic Bank.
