The Central Financial institution of Kenya (CBK) maintains that the present account deficit to shut the 12 months at 5.2 p.c regardless of an uptick in imports that has pushed it increased prior to now two months relative to the start of this 12 months.
The present account — which measures inflows and outflows of laborious forex — widened to five.4 p.c of gross home product within the 12 months to June in comparison with 4.8 p.c on the finish of final 12 months.
This has been pushed by a better import invoice resulting from rising oil costs and the persevering with restoration of the economic system that has raised client spending and industrial imports.
Exports and diaspora inflows have additionally gone up, though at a slower tempo in comparison with imports.
The persevering with struggles of the tourism sector have weighed in opposition to a decrease present account deficit, with arrivals decrease by greater than 70 p.c in comparison with the pre-pandemic interval.
“It’s at 5.4 p.c in June and we anticipate that may stay at 5.2 p.c for the 12 months.
“There have been important transactions on the capital accounts facet as properly with the flows acquired (from exterior loans) on the finish of June,” stated CB governor Patrick Njoroge final week.
Within the first six months of the 12 months, Kenya’s imports went up by 21.9 p.c in comparison with an analogous interval in 2020, primarily reflecting will increase in imports of oil and different intermediate items.
Exports grew by 11.1 p.c within the interval, backed by increased earnings from horticulture and manufactured items, which rose by 29.4 p.c and 45.2 p.c respectively.
The CBK stated that receipts from tea exports fell by 5.5 p.c, nonetheless, attributed to the influence of accelerated purchases in 2020 when patrons have been stocking up in concern of provide chain disruptions as a result of Covid-19 outbreak.
Remittances rose by 20.4 p.c within the first half of 2021 to 1.75 billion (Sh190.1 billion), and are anticipated to stay sturdy for the remainder of the 12 months.