Kenya’s current account deficit (CAD) narrowed further in the 12 months to October 2020 on the back of agricultural exports and resilient remittances.
According to the Central Bank of Kenya data, the current account deficit narrowed to 4.9 percent of GDP in the 12 months to October 2020 compared to 5.3 percent of GDP during a similar period in 2019.
“This reflected strong performance of agricultural exports, resilient remittances, as well as lower oil imports,” said the CBK in its Weekly Bulletin.
Current Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends), and net transfer payments (such as foreign aid).
The government projects its fiscal deficit will decline to 4.9% of GDP in FY 2020/21.
The Central Bank projects a 1.3 percent economic growth for 2020 from the 3.1 percent estimate disclosed in September.
Early in the week, the World Bank said the economy is expected to contract between 1.0 percent and 1.5 percent in 2020 FY21 with a rebound in 2021, lifting real GDP by 6.9 percent year on year.
In contrast, Treasury projects the economy to grow at 0.6 percent this year in revised estimates and not 2.6 percent announced in September.
NCBA Market Research project that the country’s GDP will contract by 1.8 percent in 2020 as our worst-case scenario.
“This is a downgrade from the initial baseline projection of a 0.2% expansion in 2020 and markedly slower than the 5.4% growth in 2019,” the team said in October.