Chief Executive Officers (CEOs) of companies operating in Kenya are concerned about the declining consumer demand.
The Central Bank of Kenya’s (CBK) CEO Survey as well as the Market Perceptions Survey whose findings were summarised in a press release from the regulator shortly after conducting the Monetary Policy Committee (MPC) on Tuesday also indicated that the the CEOs were growing uneasy of the increased costs of doing business.
The cost of doing business, according to the survey, was influenced by the weakening of the Kenya shilling, taxation, and higher energy costs.
“The CEOs Survey and Market Perceptions Survey which were conducted ahead of the MPC meeting revealed tempered optimism about business activity for the next 12 months,” read the statement in part.
A photo of the Central Bank of Kenya in Nairobi.
“Respondents expressed concerns about weakened consumer demand and increased costs of doing business attributed to the weakening of the Kenya shilling, taxation, and higher energy costs.”
The CEOs. however, remained optimistic that economic growth would remain resilient in 2023 and improve in 2024, supported by increased agricultural production.
CBK further indicated that overall inflation dropped slightly 6.8 percent in November 2023, compared to 6.9 percent in October.
Food inflation declined slightly to 7.6 percent in November from 7.8 percent in October after Kenya’s staple of maize and wheat recorded reduced prices due to recent harvests.
“Nevertheless, prices of a few vegetables particularly onions, tomatoes, and carrots, remained elevated in November due to reduced supply,” added the statement.
“Fuel inflation increased to 15.5 percent in November from 14.8 percent in October, reflecting the impact of higher international oil prices and depreciation in the shilling exchange rate.”
The report further indicated that according to the GDP data, the second quarter of 2023 posted a strong performance in the Kenyan economy, with real GDP growing by 5.4 percent compared to 5.2 percent in a
similar quarter of 2022.
“This performance reflects a strong rebound in the agriculture sector, and resilient services sector supported by robust activity in information and communication, transport and storage, financial and insurance, and accommodation and food services,” added the report.
An aerial view of Nairobi City’s skyline in 2023.