CBK Governor Patrick Njoroge [Photo: Business Daily]
The Central Bank of Kenya (CBK) now says Kenya’s current account deficit widened to 5.4 percent in 12 months to October compared to 4.8 percent in the same period last year.
This has been marked as the third-highest deficit in two years since 2018 when the country recorded a 5.8 percent trade shortfall with international partners.
The Bank mainly attributes the higher deficit to high imports, as the country imported goods and services worth $5.98 billion in the 12 months to October compared to $5.1 billion shillings in the same period last year.
The increase in imports was then attributed to higher international oil prices following an increase in global demand as economies recover from the Covid-19 pandemic and started reopening.
CBK however projects that the current account deficit will close 2021 at 5.2 percent helped by the global economic recovery.
“We are on track to close the year at 5.2 percent. This shows stability in the current account and support in the foreign exchange market,” said CBK Governor Patrick Njoroge.
CBK also anticipates a recovery in international flows through travel and remittances to support the current account.
It says Kenyans living abroad sent home Sh405.8 billion in the 12 months to October 2021, recording a 20 percent increase on the Sh338.4billion they sent home in a similar period last year.