Kenya Budget Update

NAIROBI, May 7 (Reuters) – Kenya’s budget deficit is expected to drop to 5.7 percent of GDP in the 2018/19 (July-June) fiscal year from 7.2 percent this fiscal year, estimates sent to parliament by the Treasury showed on Monday.

The East African nation has been under pressure from the International Monetary Fund and other bodies to cut its budget deficit, which peaked at 9.1 percent of economic output in 2016/17.

“This reduction will strengthen our debt sustainability position. We have carefully evaluated our external and domestic debt to ensure that we are in a position to service the same,” the Treasury said in the estimates.

It said the budget, which will be formally presented in mid-June, would set a net external financing target of 282.5 billion shillings ($2.82 billion), equivalent to 2.9 percent of GDP.

Local borrowing would amount to 276.1 billion shillings or 2.8 percent of GDP, and the government’s revenue would rise to 19.6 percent of GDP from 19.2 percent this financial year, the Treasury added.

($1 = 100.1500 Kenyan shillings)
(Reporting by Duncan Miriri
Editing by Alison Williams and Andrew Heavens)