Kenya private sector activity falls in March on Russia’s invasion of Ukraine

By Isaac Oganga

Kenyan private sector activity slowed down in March, undermined by rising input costs that were driven up partly by Russia’s invasion of Ukraine.

The S&P Global Kenya Purchasing Managers’ Index (PMI) fell to 50.5 in March from 52.9 a month earlier. The 50.0 mark separates growth from a contraction in activity.

“The slowdown was driven by rising inflation which resulted in subdued demand growth by consumers and a contraction in output by producers,” said Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank.

“Input prices rose at the fastest rate in eight years driven by higher taxes and the Russia-Ukraine conflict which has increased fuel, food, and fertiliser raw material costs.”

Inflation rose to 5.56% year-on-year in March from 5.08% a month earlier, data from the statistics office showed.

Economic activity has recovered in recent months, helped by the easing of restrictions aimed at containing the spread of COVID-19.