Kenya has increased its budget deficit forecast for the fiscal year 2023/24 (July-June) to 5.3% of GDP from 4.4%, according to a summary of revised spending estimates presented to parliament on Friday.
According to Finance Minister Njuguna Ndung’u, the larger projection was due to the weakening of the Kenyan shilling against the dollar, which increased the projected amount of cash required to repay foreign debts during the period.
President William Ruto’s government had slashed the budget deficit sharply in June when it first presented it to parliament, as it sought to reassure markets that it was serious about reining in ballooning debt.
But a steep weakening of the shilling, which is down 18% against the dollar this year so far, has frustrated that effort.
“It is time to drop politics and look at the reality in the world economies,” Ndung’u said.
