Files
Abstract
In the October – December quarter of 2012, the business
climate index declined to 4.5 points having recorded a score
of 8 points in the previous (July – September) quarter. The
deterioration of business environment perceptions emanated
from elevated risks arising from the budget support
withdrawals by some development partners and anxiety
over potential business interruptions emanating from the
presidential elections in neighbouring Kenya. Expectations
for the next quarter are such that the business climate
will start to improve but at a slower pace compared to
the previous quarter. The drivers of the expected business
climate improvement are anchored on the expected continuity
in macroeconomic stability, recovery in domestic demand,
and an upturn in the global economic outlook that
is expected to boost export demand. On the overall, the
business environment remains largely unchanged, having
improved only modestly, and is expected to remain weak
in the short term.