NAIROBI (Reuters) -Kenya’s budget deficit is expected to reduce next year as the East African nation’s economy continues its recovery from the effects of the COVID-19 pandemic, a finance ministry document seen by Reuters on Wednesday showed.
The economy is expected to slow this year after an unexpected resurgence in 2021 following a contraction 2020 as a result of the pandemic, the document showed.
The budget deficit is seen at 4.4% of gross domestic product (GDP) in 2023/24 (July-June) and 3.2% of GDP in 2025/26 from 6.1% in 2022/23, according to the document.
The document forecast overall spending of 3.58 trillion shillings ($30 billion) in 2023/24 from 3.36 trillion shillings in 2022/23.
Kenya’s GDP growth is expected to be 5.5% this year from 7.5% in 2021, the document said, continuing a recovery from the pandemic, which had led to a contraction of 0.3 percent in 2020.
The document said leading indicators of economic activity show continued strong performance in the second quarter of 2022, mainly in transport and storage, wholesale and retail trade, construction, information and communication, and accommodation and food services.
“As such, the economy is expected to remain resilient at 5.5 percent in 2022, and grow by an average of 6.0 percent over the medium term,” it said.
($1 = 120.3000 Kenyan shillings)
(Reporting by George ObulutsaWriting by James Macharia Chege)
