By Reuters
Private sector activity in Kenya grew in June thanks to reduced curfew
hours and the relaxation of
lockdowns in Europe that boosted demand for
exports, but the outlook for the months ahead remains gloomy, a survey
showed on Friday.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) stood at
46.6 in June, rebounding from May’s 36.7 but staying below the 50 mark
separating expansion from contraction.
Kenya has had a daily curfew in place since March to help curb the
spread of the novel coronavirus. It shortened the curfew hours in June,
providing respite for businesses hit by a shorter working day.
“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.
As of Thursday, Kenya had 6,673 confirmed COVID-19 cases, and had reported 149 deaths.
The virus has led to stagnated economic activity, with tourism,
horticulture, transport, manufacturing and small and medium-sized
businesses hit hardest.
The finance ministry expects economic growth to slow to 2.5% this year
from 5.4% last year, while the International Monetary Fund is
forecasting a 0.3% contraction this year.
The survey compilers said easing restrictions in some countries in
Europe had led to an increase in demand for exports, which also
contributed to higher activity.
“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.
“However, the damage done by COVID-19 could last for the better part of
the next six months, notwithstanding what official growth statistics
may indicate.”
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