(4 minute read)
- The Central Bank of Kenya (CBK) unveiled the Monetary Policy Committee(MPC) CEO Survey of July 2021
- The survey presents confidence in Kenya’s economic growth prospects in 2021. Over 45% of those CEOs interviewed by CBK expect higher growth
- Over 29% of business leaders see lower growth figures this year due to a sluggish tourism sector and increasing political activity.
The Central Bank of Kenya (CBK) unveiled the Monetary Policy Committee(MPC) CEO Survey of July 2021. The survey presents confidence in Kenya’s economic growth prospects in 2021. Over 45% of those CEOs interviewed by CBK expect higher growth. Over 29% of business leaders see lower growth figures this year due to a sluggish tourism sector and increasing political activity. This coupled with higher taxation could delay significant investment decisions.
CEOs expressed concerns over the impact of pandemic, especially disruption of the cash flows for firms. Coupled with less favorable weather conditions and heightened political activity, there is a possibility of delaying significant investment decisions. Increased tax burden is another concern.
The level of business confidence and faith in the recovery of the global economy had increased compared to May, when the last Survey was conducted, supported by increasing vaccination rates across the globe to deal with the pandemic and state’s investments in real estate and infrastructure projects.
Business activity indicators for Q3 of 2021 compared to Q2 were rather mixed, difficult to make out which way the economy is moving. Firms anticipate more production volumes, sales and better prices in Q4, which can be a bellwether for the future direction of the growth. Reduced consumer demand and increased taxation were identified, among others, as significant factors that could constrain the expansion 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. It is designed to capture top firms’ perceptions, expectations, and decisions and supports critical policy decisions, including monetary policy. The MPC Market Perceptions Survey supplements Survey of Hotels.
