Kenyans will have to dig deeper into their pockets to meet basic needs as prices of goods are projected to rise according to a monthly purchasing report by Stanbic Bank.
The Purchasing Managing Index (PMI) report, indicates an upward surge in prices occasioned by companies passing down increased government taxation to consumers.
“Higher purchasing costs were often passed on to customers in the form of greater selling prices, according to survey respondents. Subsequently, January data signaled a solid increase in average prices charged,” the report noted.
The PMI report further indicates that higher taxation has led to an increase in commodity prices and other imported items.
This, together with Kenyan firms purchasing more inputs, resulted in the rise in prices charged to the consumer. On the flipside, the latest survey data revealed that the quantity of purchases rose for the sixth consecutive month.
This places Kenya at an unstable position that has resulted in a slowed growth rate, the weakest observed during the month under review.
Optimism levels across the private sector also remained weak in January. The Future Output Index posted one of its lowest readings since the survey began 11 years ago, although it was slightly above December's performance.
The low optimism was illustrated by a decrease in staffing numbers during the month of January after a three month run of expansion.
Even so, the latest survey signaled that only a fractional reduction heightened by a sense of uncertainty is expected to prevail that may lead to an economic downturn.
In another report by the Kenya National Chamber of Commerce and Industry (KNCCI), it is estimated that 60 per cent of Kenyan businesses would cut down on hiring in 2025 due to high taxation, unfavourable government policies and limited access to capital.
This paints a gloomy picture to large number of Kenyans who are already jobless.
Only 6 per cent of companies remain hopeful of expanding their output over the next 12 months, with sentiments revolving around new products and services and increased marketing activity.
“The Kenyan Purchasing Managers Index (PMI) expanded for a fourth month running in January but at a slightly weaker pace than in the two preceding months, reflecting the ongoing resilience of the private sector at the start of this year,” stated Christopher Legilisho, an economist at Standard Bank.
