Kenya’s economy gains fresh impetus from rising optimism

But the resumption of rains has boosted agriculture, offering hope that the sector will speed up Kenya’s recovery in the second half given that its the largest sector and its performance directly influences the economic fortunes of Kenya.

It also puts money in the pockets of three out of every five working Kenyans.

Banks are also increasing their lending especially to households, a move that could also provide new demand for goods and services.

Demand and low inflation levels are behind retailers’ optimism for increased demand in the six months to December.

“June and July were not particularly very good for supermarkets. We recorded low customer numbers” said Mr Francis Maswili, the general manager of the Naivas supermarket chain. “We project good customer numbers starting September; this is usually the beginning of increased spending by most Kenyans.”

Inflation slowed to 3.2 per cent in June from 3.9 per cent in May on the backdrop of a fall in food, transport and utility costs.

The value has been falling since March as the long rains bolstered crop harvests and easing food prices.

“More customers are able to afford goods when the inflation is low. This good for the retailer and for the economy” said Anna Ndung’u, TNS Research International’s account director for retail research.