Current account deficit narrows in 2023 on higher exports
By Xinhua News Agency and Print Reporter, August 17, 2023Kenya’s current account narrowed to $4.63 billion (Sh666 billion in the financial year ending in June, compared to $5.833 billion posted as of June 2022, according to the National Treasury.
According to the Treasury’s quarterly economic and budgetary review for the fourth quarter of the 2022/2023 financial year, the current account balance was supported by an improvement in the net merchandise account and the net secondary income balance despite a deterioration in the net primary income balance and net receipts on the services account.
The Treasury said that the balance in the merchandise account improved by 1.3 billion dollars mainly due to an improvement in the export earnings and a decline in the import bill.
The report said that in the period under review, exports grew 2.1 per cent primarily driven by improved receipts from tea and manufactured goods. “The increase in receipts from tea exports reflects improved prices attributed to demand from traditional markets. On the other hand, imports declined by 6.1 per cent in the 12 months to June 2023, reflecting lower imports of infrastructure-related equipment due to completed projects,” it said.
Meanwhile, the Monetary Policy Committee (MPC) meeting on August 9, 2023 disclosed that goods exports have remained resilient, increasing by 2.1 per cent in the 12 months to June 2023 compared to a similar period in 2022.
Receipts from tea and manufactured exports increased by 7.0 per cent and 23.0 per cent, respectively.
The increase in tea export receipts reflects higher prices due to demand from traditional markets.
Receipts from services exports increased reflecting improvement in international travel and transport.