Most of the time we keep on asking ourselves what do they mean when someone says our economy has grown or deteriorated. The answer has always been, “I do not know.” Here is the gig for you. Looking at the affordability of commodities and services right now, things are quite expensive. Prices are hitting the roof. Technically that means you have less money to do a certain transaction. That is having unlimited wants with limited resources. At times when the economy is struck by such, we are compelled to fetch for alternatives to satisfy our wants. Inflation is one of the factors that pulls such strings, and happens in two ways ONE: when production cost increases, prices of commodities rise. That is reasonable because we all do produce to get profit. Since the prices go so high that a particular product cannot be afforded by most of the consumers, we feel the nudge of inadequacy. TWO: When demand for a particular good or service increases, the prices also go high, since we are all willing to buy it at higher prices, for example the Unga crises. Frankly, we all do feel that. For you to get a grasp of the concept there are a lot of things that you need to look at but these main indicators can depict to you where our economy stands or heads. Gross Domestic Product (GDP) is widely accepted as the primary indicator of macroeconomic performance has it majors on the four things consumption, net exports, government expenditure and investment. Consumption I addressed it earlier under inflation. When government must spend much on services they offer, salary payment on the civil servants; the taxes are expected to go high to afford such budget thus prices of commodity sky rocket, and some of entrepreneur hold on to their services and goods waiting for inflation to kick in. Purchasing Manager's Index (PMI) focuses on inventories, backlog, production levels, new orders, and employment in production companies. It focuses on contraction and expansion. If it is above 50 that is expansion, below 50 contractions. Its scale is always from one to 100. In scaling where are we at? • The Consumer Purchasing Index (CPI) is the actual measure of inflation. “A basket is aggregated by the most consumed consumer goods or services. The price of the basket is then measured against the same basket in the base year. The CPI includes several variants.” CFI TEAM.

If the CPI IS high then guess what the economy is growing. We have leading indicators that tell where the economy is going, and for sure due to political instability, drought in certain parts of the country, high unemployment rate, that tells you where we are heading. We have the lagging indicators these focus on where the economy was. Studying previous quarters to find out if there is meaningful change in the present. “Kenya has experienced continued growth in GDP over the last few years, supported by ongoing public infrastructure projects, appropriate economic and fiscal policies, strong public and private sector investment reflecting the diversified nature of our economy,” National Treasury. That is the breakdown, and what the National Treasury says. Right now, you know how tight your shoes are, so you can tell, is our economy growing or not? Where are we heading in the next three years?