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Economic Conditions

Kenya’s private sector activity recorded a weaker expansion: The Stanbic Bank Kenya Purchasing Managers’ Index (PMI)1 – which tracks business performance in the manufacturing and services sector – fell to 51 in June 2021 from 52.5 in May 2021, indicating a sustained, but weaker, expansion in the Kenyan private sector economy. Output, new orders and employment continued to rise, although rates of growth dropped, as compared to May. Purchasing of inputs also expanded during June, with firms often reporting efforts to build stock inventories in anticipation of higher new order inflows. On the price front, overall input cost inflation was unchanged as compared to May, leading businesses to raise their selling costs in a bid to sustain profit margins.

Inflation rate for June 2021: According to the Kenya National Bureau of Statistics (KNBS), the overall year on year inflation rate, as measured by the Consumer Price Index (CPI) was 6.32 percent in June 2021 from 5.87 percent in May, reaching its highest level since February 2020. The main driving factors were the prices of transport (14.71 percent vs 16.76 percent in May); food and non-alcoholic beverages (8.46 percent vs 7.02 percent); housing and utilities (4.25 percent vs 3.22 percent) and health (4.56 percent vs 4.30 percent). On a monthly basis, the consumer price index rose by 0.1 percent, after a 0.2 percent increase in May 2021.