Unemployment pain still looms large as virus crisis persists
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ECONOMY: Kenya’s economic outlook remains highly uncertain, as Coronavirus (Covid-19) continues to unfold in the country, and globally, World Bank has warned.
It says, firms expect sales to continue to contract, adding that on average, sales are expected to decrease by 26 per cent in the next six months compared to previous year.
However, the bank sees some light at the end of the tunnel and adjusts for the negative impact of the pandemic on growth in 2020, following which it projects the economy to rebound relatively quickly in 2021, lifting real gross domestic product (GDP) by 6.9 per cent year on year.
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The firms also anticipate employment to decline at a slightly lower rate than sales, according to the report titled, Navigating the Pandemic.
The report shows the virus increased poverty by four percentage points (or an additional 2 million poor) through serious impacts on livelihoods, by sharp decreases in incomes and employment.
Unemployment rate increased sharply, approximately doubling to 10.4 per cent in the second quarter as measured by the Kenya National Bureau of Statistics Quarterly Labour Force Survey.
Kenya’s economy has been dampened by measures put in place to contain the spread of the pandemic. A total of 604 firms in Kenya sent workers home due to the coronavirus fallout, according to Federation of Kenya Employers (FKE) which said that at least 33 jobs were lost in every modern sector company between March and August.
Kenya National Bureau of Statistics estimated that around 1.7 million people had been made redundant due to the outbreak during this time, a figure that FKE had termed as “conservative”.
However, the recent Stanbic Bank Kenya Purchasing Managers Index (PMI) Survey showed that Kenya’s private sector recorded a fourth straight month of growth in October, with output and new orders rising solidly amid second phased re-opening of the economy.
During the month, the PMI report also showed that firms raised their input buying during the month, with the rate of expansion the sharpest in the series so far.
The report also indicated that pre-production inventories had increased noticeably with respondents, acknowledging that stocks increased in tandem with favourable predictions for future demand.
The PMI Survey stood at 59.1 which bettered September’s 56.3 the best since the survey began in January 2014.
