By Benadeta Mwaura - Reporter
Kenya, June 18, 2026 - Kenyan businesses are increasingly cutting costs, delaying expansion plans and investing in automation as they navigate a challenging operating environment characterised by inflation risks, subdued consumer demand and tight credit conditions, according to a new survey by the Central Bank of Kenya (CBK).
The findings, contained in the CBK's May 2026 CEOs Survey released on Wednesday, indicate that firms remain cautiously optimistic about the country's economic outlook over the next 12 months despite growing concerns over rising operating costs and global uncertainties.
The survey shows that many companies are responding to mounting pressure by implementing cost-cutting measures, streamlining operations and accelerating the adoption of technology to improve efficiency and protect profit margins.
The latest business sentiment survey comes at a time when inflationary pressures are beginning to build, driven largely by higher fuel and energy costs linked to geopolitical tensions in the Middle East.
The CBK's Monetary Policy Committee retained the benchmark Central Bank Rate at 8.%er this month, citing concerns over rising inflation risks.
According to the CBK, respondents expect inflation to remain above five per cent in the near term, although still within the official target range of 2.5% to 7.5%.
Higher fuel prices, rising freight costs and increased logistics expenses are expected to continue weighing on businesses and households.
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Despite the challenging environment, business leaders remain broadly confident in Kenya's economic resilience, supported by favourable weather conditions, exchange rate stability and expectations of continued growth in key sectors such as agriculture and services. The CBK projects the economy will expand by 5.3% in 2026.
However, weak consumer demand remains a major concern for many firms, with companies reporting slower growth in sales and delayed payments compared to the first quarter of the year. Tight lending conditions and elevated borrowing costs have also constrained access to financing, limiting expansion plans and new investments.
The survey findings underscore the delicate balancing act facing Kenyan businesses as they seek to preserve profitability while navigating a complex mix of domestic and global challenges, including inflationary pressures, geopolitical risks and uncertain consumer spending patterns.
As firms continue to adapt, the CBK said maintaining macroeconomic stability, containing inflation and supporting private sector credit growth will remain critical to sustaining business confidence and economic momentum in the months ahead.