Kenya's economy is recovering

The Central Bank of Kenya (CBK) regularly conducts surveys of CEOs of leading private companies to capture their perceptions, expectations, and concerns regarding the economic situation and business outlook. The survey is conducted every two months, prior to the Monetary Policy Committee (MPC) meetings, to support monetary policy decisions. While Kenya's economy is recovering, two key sectors—manufacturing and healthcare—are coming under financial pressure and threatening to slow the overall recovery, according to a new Central Bank of Kenya (CBK) CEO survey. Key findings include: Growth forecasts for the Kenyan economy over the next 12 months have improved. This is supported by macroeconomic stability, favorable weather conditions, and expectations of improved liquidity due to falling bank lending rates. CEOs' main concerns remain subdued consumer demand, high business costs, the impact of trade conflicts, changes in US policy, and geopolitical tensions. Companies' strategic priorities for the next three years include increasing efficiency, cost optimization, diversification, talent development, good governance, sustainable growth, digital transformation, and partnerships. The survey primarily includes CEOs from the tourism, hospitality, manufacturing, financial services, agriculture, and healthcare sectors. The survey was conducted online in May 2025 among more than 1,000 private companies. The survey paints a mixed picture: Agriculture, finance, ICT, and tourism will grow thanks to favorable weather, falling interest rates, and a digitalization offensive, while manufacturers and healthcare providers report being stuck in survival mode. The manufacturing sector is facing crushing liquidity constraints, subdued consumer demand, and exploding operating costs. CEOs cite rising energy costs, taxes, and logistics costs as the main problems weakening competitiveness. @https://kenyanwallstreet.com/factories-in-crisis-hospitals-in-distress-as-ceos-warn-of-uneven-recovery-cbk-study/ @https://www.centralbank.go.ke/uploads/market_perception_surveys/1199638691_CEOs%2520Survey%2520July%25202024.pdf @https://www.pwc.nl/en/insights-and-publications/themes/economics/26th-ceo-survey/ceos-pass-on-higher-energy-costs-by-raising-product-prices.html