By George Mwangi
Special for Dow Jones Newswires
NAIROBI – Kenya’s current account deficit is expected to widen to 5.3% of gross domestic product in the 12 months to March, from 4.7% of GDP in the same period. the previous year, the country’s central bank announced on Friday.
“The wider deficit reflects a higher import bill, particularly for oil, which more than offset increased earnings from agricultural and services exports, and remittances,” the bank said.
Kenya‘s main agricultural exports are coffee, tea and cut flowers.
Remittances rose 19% in April 2022 to $355.0 million from $299.3 million in April 2021, the bank said.
In the 12 months to April, remittances reached $3.97 billion, up from $3.31 billion a year earlier, the bank said.
“Strong inflows continue to support the current account and exchange rate stability,” the bank said. “The United States remains the largest source of remittances to Kenya, accounting for 62% in April 2022.”
Kenya relies heavily on imports of petroleum products to meet its energy needs. However, the East African country hopes to start oil production this year, with output of up to 100,000 barrels per day.
Write to the Barcelona editors at [email protected]