Kenya Upgrades 2023/24 Deficit Forecast to 5.3% – Revised Budget

Mouad Boudina
Mouad Boudina
1 Min Read

Kenya has revised its financial projections for the fiscal year 2023/24 (July-June) and has announced an increase in the expected budget deficit to 5.3% of GDP, which was previously estimated at 4.4%. The updated spending estimates were presented to the parliament on Friday to convey this adjustment.

The expanded budget deficit projection can be attributed to the depreciation of the Kenyan shilling against the U.S. dollar, as explained by Finance Minister Njuguna Ndung’u. This currency devaluation has led to an increased estimation of the funds needed for servicing foreign debts during the specified period.

Njuguna Ndung’u emphasized, “Our data indicates that a substantial portion, roughly 145 billion shillings, can be attributed to the heightened interest expenses associated with our external debt, coupled with the escalation in debt volume resulting from the depreciation of the exchange rate.”

One of the foreign currency-denominated debts that the government is obligated to repay is a $2 billion Eurobond maturing in the upcoming June.

In June, President William Ruto’s government implemented a notable reduction in the budget deficit, showcasing its unwavering determination to tackle the burgeoning national debt and foster confidence within the financial markets.

Mouad Boudina

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