The Central Bank of Kenya (CBK) has released the Monetary Policy Committee(MPC) CEOs Survey of July 2021, which shows confidence in Kenya’s economic growth prospects in 2021.
But while 45% of those CEOs by interviewed by CBK’s think tank expect higher growth, 29% of business leaders see lower growth figures this year due to a sluggish tourism sector, increasing political activity, which could delay significant investment decisions, and increased taxation.
CEOs are concerned that the pandemic has affected cash flows for firms, there are less favourable weather conditions, and that heightened political activity which could delay significant investment decisions.
There was also concern from leaders about the increased tax burden.
CBK SURVEY KEY TAKEAWAYS
According to the July Survey by the CBK, the level of confidence in the growth of the firm, sector, the global economy and the country had increased compared to May, when the last Survey was conducted.
This optimism is attributed to increasing vaccination rates across the globe to deal with the pandemic and state’s investments in real estate and infrastructure projects.
The Survey notes that business activity indicators for Q3 of 2021 compared to Q2 were a mixed-signal, but firms expect more production volumes, sales and better prices in Q4.
Across all sectors, reduced consumer demand and increased taxation were identified, among others, as significant factors that could constrain the expansion/growth of private sector firms over the next 12 months.
The MPC CEO Survey was introduced in March 2021 and is conducted every two months before every Monetary Policy Committee meeting.
This MPC Survey captures top firms’ perceptions, expectations, and decisions and supports critical policy decisions, including monetary policy.
The Survey supplements the MPC Market Perceptions Survey and Survey of Hotels.
The July Survey sought CEOs views on selected indicators, including business confidence/optimism, previous quarter business activity, and outlook for business activity in the near term.
MPC also sought to establish the critical internal and external factors that could influence the business outlook and strategic priorities over the medium term.
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