NAIROBI (Reuters) – Kenya has cut its domestic borrowing target for the 2011/12 fiscal year to 62.1
billion shillings from 119.5 billion, thanks to a $600 million syndicated loan due to be concluded in April, according to a
budget policy statement.
counts Kenya shillings at a money exchange counter in Nairob, Kenya, October 23, 2008. REUTERS/Antony Njuguna
The 2012 budget statement said the domestic borrowing target would be 106.7 billion shillings in the
2012/13 fiscal year that starts in July, with the remaining 60.7 billion of the projected budget deficit covered by net
external financing.
The statement said Kenya’s economy was estimated to have grown by 4.5 percent in 2011 and that
growth would accelerate to 5.2 percent this year, lower than previous forecasts.
The forecast for 2012 growth has been
ratcheted down from 5.7 percent in last year’s budget statement. In January, former finance minister Uhuru Kenyatta said the
economy would grow 5.3 percent this year.
The 2012 Budget Policy Statement said the growth projections were 5.5
percent for the 2012/13 fiscal year, rising to 5.9 percent in 2013/14 and 6.3 percent in 2014/15.
It said the risks to
the outlook included a further weakening of global economic growth and possible dry weather.
“Also, reversal in the
current easing of international oil prices may fuel inflation and weaken growth,” it said.
The statement said the
current account deficit stood at about 11 percent in the current fiscal year, but was expected to declined to 6.1 percent in
2014/15.
“We expect the easing of public and private demand to put less pressure on the current account. Also, we
expect continued flow of remittances which has recently played a key role in the economy,” the statement said.