Kenya private sector expansion rebounds in August -PMI

NAIROBI, Sept 5 (Reuters) - Kenya's private sector activity expanded at a faster pace in August after dropping to a six-month low in the previous month as output and new orders for firms recovered, a survey showed on Wednesday.

The Markit Stanbic Bank Kenya Purchasing Managers' Index(PMI) for manufacturing and services rose to 54.6 last month from 53.6 in July. A reading above 50 denotes growth.

Firms that took part in the survey said they had boosted production during the month after receiving more customer orders.

"The recovery in output and new orders helped counterbalance cost pressures that have re-emerged over the past couple of months," said Jibran Qureishi, economist for East Africa at Stanbic Bank.

He warned however that a series of new consumption taxes including on petroleum products, imposed by the government as it seeks to boost its revenues, could negatively impact the economy. [nL8N1VP2KG]

"If the VAT on fuel products stays in place, there will probably be a notable second-round impact in the economy," Qureishi said.

Kenyan economic activity has picked up after political unrest and drought cut growth last year to its lowest level in more than five years, and the economy is forecast to expand by 5.8 percent this year from 4.9 percent in 2017.

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(Reporting by Duncan Miriri, Editing by Catherine Evans)

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2018-09-05 10:04:32

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