FILE PHOTO | NMG
Kenya’s current account deficit widened to 6.2 percent of gross domestic product (GDP) in the one year to March from 5.8 percent in December 2019, attributed by the Central Bank of Kenya (CBK) to lower inflows from horticulture exports and tourism due to Covid-19 pandemic.
The disruption in air travel hit the horticulture and tourism sectors hard, but the matching fall in imports has partially mitigated the negative effect on the current account, which measures the net of the country’s forex inflows and outflows.
This was mainly due to reduced demand in Kenya’s key export market destinations,” said CBK in a presentation to the Senate on the Covid-19 situation on May 7.
“The imports of petroleum products are expected to decline by $1.1 billion (or 32 per cent) due to low international oil prices, offsetting the decline in export earnings and remittances,” said CBK.
Latest trade data published by the CBK covering the first two months of the year showed that although horticulture export inflows were falling, tea and coffee had recorded an increase in earnings.
