Kenya’s private sector activity shrank in March 2026 for the first time since August 2025, as geopolitical tensions in the Middle East weighed on demand and business confidence, a survey revealed on Tuesday.
The Stanbic Bank Kenya Purchasing Managers’ Index fell to 47.7 in March from 50.4 in February, dropping below the 50-point threshold that signals growth. The decline reflects reduced customer spending, constrained cash circulation, and tighter household budgets.
Stanbic Bank noted that the Middle East conflict also disrupted logistics, increased fuel and transport costs, and prompted more cautious spending among firms. Wholesale and retail was the only sector to record growth, while output and new orders declined across most industries.
William Ruto said on March 30 that the government is assessing the war’s impact on prices and taking steps to safeguard supply levels. Despite the slowdown, Kenya’s finance ministry projects economic growth of 5.3% this year, up from 5.0% in 2025 and 4.7% in 2024, although businesses remain wary of ongoing geopolitical disruptions.