Paul Arithi 
(L-R) ICEA LION Asset Management (ILAM), CEO Mr. Einstein Kihanda, Portfolio Manager Rachel Gumbi, and Head of Research Judd Muregi, during the company's Quarterly Investor Pulse presentation and the release of the Q1 Consumer Spending Index.
ICEA LION Asset Management has released its latest Q2 2025 Investor Pulse dubbed, “Global Volatility, Local Stability,” which predicts strong GDP growth and a positive outlook for the Nairobi Securities Exchange despite anticipated global market volatility.
Speaking during the launch, Racheal Ngumbi, Portfolio Manager at ICEA LION Asset Management, shared key market insights, highlighting the impact of ongoing global events and the outlook for Kenya’s economy.
Ngumbi said that the ongoing trade tensions between the US and China are projected to significantly reduce growth in both economies while pushing inflation higher.
She further said that China’s s inflation is expected to rise more than America’s though it will remain below 1 percent compared to over 3 per cent in the US.
This trend may prompt central banks in developed economies to gradually reduce policy rates, which is in line with the accommodative policy being pursued by the CBK, she said.
She says that the ripple effects of global volatility are expected to result in the lowest performance of international markets in the last three years.
She further said that Kenya’s GDP growth is projected to approach or exceed 5%, supported by reduced political volatility and increased private sector credit growth.
Inflation though may trend upward towards mid-single digits.
She added that the Nairobi Securities Exchange (NSE) remains an attractive investment choice because at current levels the NSE offers more value than other African equity markets
During the same event, ICEA LION Asset Management also released the Q1 2025 ILAM Consumer Spending Index, a tool designed to track consumer spending as an indicator of real economy trends.
The index draws data from interviews with approximately 1,200 consumers and over 200 retail businesses across major urban centres in Kenya.
Judd Murigi, Head of Research at ICEA LION Asset Management, presented key findings stating that since the index’s inception in 2023,spending is increasingly driven by volumes than pricing.
She highlighted that Workers in the education and training sectors reported the highest spending increases.
While on the other hand, hospitality sector recorded the highest proportion of employees with reduced spending.
Murigi noted that over 30% of individuals surveyed reported higher incomes in Q1 2025 compared to the same period in 2024, while 40 percent saw no change and 30 percent reported income declines.
“The education and training sectors led in income growth.The trade sector recorded the highest proportion of income decline,” read part of the statement.
She said that Banks remain a preferred investment option where a majority of respondents continue to prefer investing in bank deposits, chamas, and SACCOs.
She highlighted that nearly 60 percent of retail businesses reported higher sales in Q1 2025 compared to Q1 2024, while slightly over 40 percent experienced lower sales.
“Apparel stores had the most notable drop in sales tends, while retail shopping stores and food and beverage outlets recorded the most improved sales trends,” read part of the statement.
She said that sales increases were mainly attributed to more customers, rather than price hikes.
“Mombasa reported the highest proportion of businesses with improved sales, while Eldoret, Kisumu, and Nyeri recorded lower sales levels,” she said.
Further, she explains that the index fell by 3% from Q4 2024, attributed to a post-holiday season lull among retail businesses.
Einstein Kihanda, ICEA LION Asset Management CEO, said that, “Local investments may offer more stability than global markets in 2025.”
