Kenya to cut fiscal deficit in 2021/22 to 7.5% of GDP

KENYA will reduce its budget deficit to 7.5% of GDP in the 2021/22 (July-June) financial year, from 9.0% this fiscal year, the National Treasury said in a draft budget policy statement.

Like other economies around the world, the East African nation has been battered by the impact of the coronavirus crisis, with prolonged lockdown measures curbing economic output and hitting government revenue.

Economic growth is expected to rebound from the virus-induced slump, expanding by 6.4% in 2021 from an estimated 0.6% last year, Treasury said in the document seen by Reuters on Tuesday.

Government’s revenue collection was now expected to bounce back, it said, citing the expected pick-up in economic activity and enhanced measures to collect more tax.

“Together with expenditure rationalization measures that we have instituted, we expect the funding pressures to ease and create fiscal space for priority programmes,” it said.

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