Kenya’s current account deficit remains high, the Central Bank of Kenya (CBK) said on Friday.
Data from the Central Bank of Kenya (CBK) shows the deficit, measured as a percentage of the gross domestic product, stood at 5.4 per cent in the 12 months to July 2021 compared to 4.9 per cent of GDP in the corresponding year.
The country’s current account deficit has been a key parameter for the CBK while setting monetary policy.
“The higher deficit was attributed to lower service receipts as well as high imports, which more than offset increased receipts from agricultural exports and remittances,” the CBK said in its Weekly Bulletin.
According to the data, Kenya imported goods and services worth $5.5 billion ( KSh594 billion) in 12 months to July compared to $5.1 billion (KSh550.8 billion) same period last year.
Kenya’s Current Account Deficit Widens to 5.4% of GDP in June
The World Bank in its 23rd Kenya Economic Update, expects the country’s current account deficit to widen on the rebounding of domestic demand which is set to fuel imports as firms increase input purchases.
The current account is projected to widen to 5.5 per cent this year from 4.8 per cent in 2020.
“That said, the current account deficit remains financed, as signalled by the identified external debt sources in FY2021/22,” Genghis Capital said in its Cross Asset Weekly Strategy issued 6th Sept 2021.
