Kenya’s current account deficit has narrowed to 3.6% of GDP by December 2024, down from 4.4% in 2023. The improvement is primarily due to increased exports and remittance inflows. Macroeconomic stability, particularly in inflation and exchange rates, has fostered a favorable environment for private sector growth.
Kenya has successfully reduced its current account deficit to 3.6% of GDP for the year ending December 2024, down from 4.4% in 2023. This improvement reflects a positive shift in the country’s economic performance, as reported by John Mbadi, the cabinet secretary of the national treasury and economic planning, during a press briefing in Nairobi. The decrease in the deficit is attributed mainly to a rise in exports and increased remittance inflows from abroad.
John Mbadi highlighted that the inflow of remittances has significantly contributed to strengthening the nation’s foreign exchange reserves, with portions directed towards investment opportunities while also enhancing household consumption levels. Furthermore, stability in key macroeconomic indicators such as inflation rates and exchange rates has created a conducive environment for private sector growth.
Overall, the reduction in Kenya’s current account deficit signifies a strengthening of its economy, influenced by favorable trade balances and external financial support through remittances. This trend bodes well for future economic planning and development within the country.
In summary, Kenya’s current account deficit has notably decreased to 3.6% of GDP by the end of 2024, indicating an improvement from the previous year. This positive shift is attributed to increased exports and higher remittance inflows, which bolster foreign exchange reserves and consumer spending. Stabilized inflation and exchange rates further enhance the economic environment, supporting private sector initiatives.
Original Source: thepeninsulaqatar.com
