NAIROBI (Xinhua) --
Kenya’s current account deficit is likely to
reduce to 5.5 percent in the 2016/2017 financial year, down from
an estimated 8 percent the previous year, an International
Monetary Fund (IMF) official said on Wednesday.
Kenya Resident Representative Armando Morales told Xinhua in
Nairobi that the lowering is due to reduction of the price of
oil in the international market.
"Oil constitutes a significant portion of country’s imports
and so the price of oil has big impact on current account
deficit," Morales said.
"Reduction of imports of capital goods is also expected and
this will help to lower the current account deficit," Morales
said on the sidelines of the launch of Kenya Economic Report
He said a contraction of the trade deficit will reduce
external pressure on the economy, which he said a move in the
According to the National Treasury, the country’s fiscal
deficit was 7.6 percent of the Gross Domestic Product in the
last financial year, and predicts that it will rise to 9.3
percent in the current financial year.
IMF is set to release it projections for the fiscal deficit
for the 2016/2017 financial year later in the year after
gathering more information.
Morales said that a widening fiscal deficit could affect the
rates at which government borrows through treasury bills.
The IMF official noted that the fiscal deficit is also
impacted by the rate at which government executes its