Kenya expects its fiscal budget deficit to shrink to 3.6% of gross domestic product (GDP) during the July 2027 to June 2028 fiscal year.
The forecast signals a sharp drop from the 5.5% deficit targeted for the 2026/27 financial year. Kenyan Finance Ministry Principal Secretary Chris Kiptoo announced the updated projections during a public hearing kick-off meeting on Wednesday.
“We remain committed to fiscal consolidation because it is in the country’s best interest to reduce debt and sustain economic stability,” Kiptoo stated.
East Africa’s largest economy is forecast to grow by 5.1% in 2027 and 5.2% in 2028, Kiptoo noted. Annual real GDP expansion for 2026 is currently estimated at 5.0%.
The National Treasury is advancing its budget calendar earlier than usual. The move accommodates Kenya’s upcoming general elections scheduled for August 2027, accelerating standard June parliamentary deadlines.
The projected 3.6% target advances a multi-year fiscal consolidation plan. Fiscal policy aims to stabilize domestic debt servicing obligations while maintaining key public investments.
Recent efforts follow economic pressures from rising energy prices and global market uncertainties. Official data shows domestic inflation cooled to near 4.4%, helping stabilize the local currency over recent months.
Under national medium-term guidelines, the finance ministry targets further deficit reductions down to 3.3% of GDP by FY 2028/29. Revenue strategies emphasize expanding tax collections via the Kenya Revenue Authority.
