Kenyan Firms Optimistic of Rapid Recovery Post-August Elections – CBK Poll

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Nairobi — Kenyan firms are optimistic that business activity will rapidly pick up post the August 8 General Election, a new poll released by the Central Bank of Kenya has revealed.

The Monetary Policy Committee (MPC) survey conducted among Chief Executive Officers (CEOs) of 230 private sector firms however listed political uncertainties among the top factors that could constrain expansion in the next 12 months.

Worries over political uncertainties dropped with the percentage of CEOs worried about political activities dropping to 20 percent compared to the 23 percent reported three months ago.

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The poll done between March 1 and 14 2022, reported economic environment concerns at 15 percent while reduced consumer demand and cost of doing business were listed by 11 percent of the respondents

“Firms continue to be concerned that business activity will be affected by increased political activity as investors adopt a ‘wait and see’ approach to investments. On the brighter side, most firms remain optimistic that business activity to quickly pickup shortly after the conclusion of the elections,” the poll indicated.

Compared to Q2 2021, the firms are optimistic about growth prospects specifically in the agriculture and services sector in Q2 2021 driven by lower COVID-19 infections, continued government spending on infrastructure, and anticipated favorable weather conditions

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“Demand/orders, production volumes, and the number of full-time employees are expected to remain at the same level for the majority of firms,” the poll indicated.

The CEOs further forecasted an increase in prices of goods and services sold as supply chain bottlenecks and high input costs persist.

” The scope for passing this on to consumers in the form of higher prices of goods and services sold will however remain limited as firms foresee those higher costs will negatively impact demand,”

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Geopolitical tensions specifically the Ukraine-Russia tension also featured as a top concern for the firms.

Respondents cited the Russia-Ukraine conflict which represents a substantial threat to growth, driving stronger inflationary pressures and potentially eroding the gains made from the recovery from COVID-19

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