Kenya's private sector experienced its sharpest decline in activity since June 2024, largely due to high inflation and ongoing political unrest. The Stanbic Performance Managers Index (PMI) dropped for the third consecutive month to 46.8 in July, down from 48.6 in June, indicating a solid downturn in economic health.

• The PMI reading of 46.8 signals a significant downturn in private sector health, falling further below the 50.0 neutral threshold.
• The decline in business activity was driven by weakened order inflows, rising price pressures, reduced customer spending power, and political protests leading to lower footfall, as reported by survey participants.
• Input cost inflation, fueled by steep increases in fuel prices and higher tax payments, rose at its fastest pace in seven months, leading to a marked rise in selling prices, the most significant since the start of the year.