NAIROBI, April 7 – Kenya’s private sector activity contracted in March for the first time since August 2025, as external shocks linked to tensions in the Middle East weighed on demand and business output.
The Purchasing Managers’ Index compiled by Stanbic Bank Kenya fell to 47.7 in March from 50.4 in February, slipping below the 50-point threshold that separates expansion from contraction.
The decline signals a broad-based slowdown in business conditions, with most sectors reporting weaker output and a drop in new orders. Wholesale and retail trade was the only segment to record growth, highlighting uneven performance across the economy.
Stanbic Bank economist Christopher Legilisho said the downturn reflects rising uncertainty tied to geopolitical developments, with firms anticipating continued disruption to operations and demand.
President William Ruto said the government is assessing the impact of the Middle East conflict on domestic prices and is working to ensure adequate supply of essential goods.
Despite the near-term slowdown, Kenya’s medium-term outlook remains relatively stable. The finance ministry estimates the economy expanded by 5.0% in 2025 and projects growth of 5.3% in 2026, up from 4.7% recorded in 2024.
The latest data underscores how global geopolitical tensions are beginning to filter through into domestic business conditions, raising concerns about the pace of economic activity in the months ahead.
