Kenya’s current account deficit for the 12 months to November narrowed compared to a year earlier, helped by diaspora remittances and earnings from exports.
Latest Central Bank of Kenya data shows that the current account deficit as a percentage of gross domestic product (GDP) stood at 4.7 per cent to 4.7 percent
of GDP in the year to November 2020 compared to 5.4 percent of GDP in the year to November 2019.
Central bank said the trade deficit narrowed due to improvement was attributed to savings from oil imports, resilient earnings from exports and remittances.
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).
In November, Kenyans in the diaspora send home KSh28 billion.
“Remittance inflows remained strong in November amounting to $257.7 million (Sh27.96 billion) compared to $218.8 million ( KSh23.74 billion) in November 2019, an increase of 17.7 percent. The cumulative inflows in the 12 months to November totalled $3.045 billion (Sh330.4 billion) compared to $2.79 billion (Sh302.7 billion) in the 12 months to November 2019,”said CBK.
Business Daily reported that export earnings for the 10 months to October grew the fastest in five years. Total exports in the period grew by 6.4 per cent to Sh532.91 billion from Sh500.79 billion in the corresponding period last year attributed to better performance of the traditional exports such as coffee, tea and petroleum products.
The government projects its fiscal deficit will decline to 4.9% of GDP in FY 2020/21.