Kenya private sector activity rises in January -PMI

NAIROBI (Reuters) - Kenya's private sector activity jumped in January, with output increasing after the reopening of schools and more businesses that had been closed to curb the COVID-19 pandemic, a survey showed on Wednesday.

The Markit Stanbic Bank Kenya Purchasing Managers' Index (PMI) jumped to 53.2 in January from 51.4 a month earlier. The 50.0 mark separates growth from contraction.

"Firms highlighted that the reopening of businesses and improved cash flow in the economy helped to generate higher customer spending," the survey compilers said.

Like other countries, Kenya's tourism, education and other major sectors have been hit by the coronavirus crisis.

Its economy shrank 1.1% year-on-year in the third quarter of 2020 compared with growth of 5.8% in the same period in 2019, as the pandemic hurt the hospitality sector, although growth in agriculture and construction provided a cushion.

The third quarter contraction was smaller than that in the second quarter, when it shrank 5.7% year-on-year.

"Economic activity picked up in January on account of an improvement in customer spending due to improving cash flows in the economy and the re-opening of schools," said Kuria Kamau, fixed income and currency strategist at Stanbic Bank.

The government projects the economy will grow 6.4% this year from an estimated 0.6% last year.

In January, it extended its nightly curfew to March 12 as part of measures aimed at taming the spread of COVID-19.

(Reporting by George Obulutsa; Editing by Catherine Evans)