The gap between Kenyan imports and exports which form the current account has narrowed to 4.8 percent of GDP in May from 5.1 percent in April on easing import costs pressure.
The improvement that points to an improved trade balance aligns with the CBK target of a deficit of no more than 4.8 percent at the end of 2023.
According to Central Bank of Kenya (CBK) data, the current account deficit stood at an equivalent Sh769.3 billion ($5.326 billion) in the first five months of the year compared to Sh833.4 billion ($5.77 billion) previously.
This is when import costs eased slightly to Sh2.577 trillion from Sh2.639 trillion a year earlier.
Nevertheless, the cost of importing oil products increased to Sh750.5 billion over the period from Sh629 billion in five months to May 2022.
The improved current account deficit is against a drop in the value of exports by seven percent to Sh1.54 trillion ($10.965 billion) in the five months from Sh1.704 trillion ($11.795 billion) last year.
The fall in exports came against an improved liftoff of Kenya’s cash crops into international markets.
Tea exports, for instance, improved to Sh1.066 trillion from Sh1.011 trillion while horticulture fetched Sh196 billion from Sh173 billion a year earlier.
Exported manufactured goods however plunged to Sh126.4 billion from Sh145.8 billion. The lethargy in exports is despite a weaker local exchange rate which had been widely tipped to cushion exports.
