Key facts
- Kenya's fiscal deficit exceeded its quarterly target in the third quarter.
- Revenue underperformed the target by KES 116 billion (5%) through March.
- Recurrent spending overshot projections, primarily due to higher operations and maintenance costs.
- Domestic borrowing dominated the financing of the deficit.
- The full-year fiscal deficit is now projected to be 6.3% of GDP, revised upward from the initial 4.7%.
Kenya's fiscal deficit for the third quarter surpassed its targeted level, driven by a revenue shortfall and increased recurrent expenditures. Revenue collections were KES 116 billion, or 5%, below target through March. Higher operations and maintenance costs contributed to recurrent spending exceeding projections. The government primarily financed the deficit through domestic borrowing. Despite the quarterly underperformance, the Treasury revised its full-year revenue estimates upward in a supplementary budget. Consequently, the projected fiscal deficit for the full fiscal year has been increased to 6.3% of GDP, a significant rise from the initially budgeted 4.7%.