Chief executive officers across Kenya are projecting improved business performance in 2026, citing a more stable economic climate marked by easing inflation and a relatively steady shilling.

Findings from the latest survey by the Central Bank of Kenya (CBK) show that corporate leaders are encouraged by falling lending rates, expectations of favourable weather, and sustained public investment in infrastructure.

Earlier this month, the CBK reduced its benchmark lending rate to 8.75 per cent, down from 9 per cent, as part of efforts to stimulate private sector borrowing amid improving macroeconomic fundamentals and exchange rate stability.

The rate adjustment followed a slight decline in inflation, which edged down to 4.4 per cent last month from 4.5 per cent in December 2025, reinforcing confidence that price pressures remain under control.

According to the survey, business optimism is largely anchored on growing demand within key service industries such as professional services, financial services, hospitality and ICT. Expansion into new customer segments—particularly through digital marketing strategies—has also contributed to the upbeat sentiment.

The poll, conducted between January 12 and 23, 2026, gathered views from CEOs of private sector firms, including members of the Kenya Association of Manufacturers (KAM), the Kenya National Chamber of Commerce and Industry (KNCCI) and the Kenya Private Sector Alliance (KEPSA).

Despite the generally positive outlook, executives highlighted persistent hurdles, notably high operating expenses and intense market competition.

The report further indicated that wholesale and retail trade remains subdued due to weak consumer spending. Meanwhile, growth in the health sector continues to face headwinds stemming from mounting pending bills and transitional challenges associated with the rollout of the new health insurance scheme, which has slowed activity across the industry.