Rising Oil Prices, Poor Rains Remains a Worry for Kenya’s Optimistic Business Sector

Kenya’s economy remains bullish for the private sector that continues to exhibit sustained optimism, but and there are risks too, according to the latest survey on market conditions.

In its May 2019 survey on market conditions, the Central Bank of Kenya (CBK), showed that the private sector expects inflation to remain within the target range, with expectations of lower food prices following improved weather conditions, and the stability in the exchange rate.

However, besides tailwinds as a result of the ongoing public infrastructure investments, implementation of the Big 4 projects by the Government, expected growth in tourism, a stable macroeconomic environment and improved investor confidence in the economy, the private sector are worried by the rise in international oil prices, risk of insufficient long rains and concern.

“Global growth is expected to slow down in 2019, largely due to the escalation of trade tensions between the U.S. and China, increased uncertainties over the nature of Brexit, and the pace of normalization of monetary policy in the advanced economies. These developments may result in increased volatility in the global financial markets,” said Dr. Patrick Njoroge, the Central Bank Governor.