Kenya’s trade deficit narrowed by 12.5 percent in the third quarter to September compared to a similar quarter in 2022 after the country’s export earnings rose sharply.
Data released by the Kenya National Bureau of Statistics (KNBS) shows Kenya’s trade deficit declined to Sh379.2 billion during the quarter from Sh433.8 billion in the third quarter of 2022.
It is also a significant drop from a negative trade balance of Sh397.8 billion recorded during the April-June quarter.
A narrowing trade deficit indicates that the country's capacity to create jobs and support currency has increased.
The narrower trade deficit comes after total exports grew by 19.6 percent while imports declined by 1.6 percent compared to 2022.
“The rise in earnings from exports in the third quarter of 2023 was largely boosted by increased domestic exports of tea and horticulture,” said the KNBS.
It added: “Conversely, the decline in import expenditure in the same period was majorly occasioned by significant decreases in imports of petroleum products, iron and steel, and chemical fertilisers.”
The quarter under review saw the value of imports decline to Sh648.5 billion compared to Sh659 billion a year earlier, while exports went up to Sh269.3 billion from Sh225.2 billion.
Earnings from exports of fresh fruits, vegetables and cut flowers recorded the highest rise in the quarter, rising from Sh34.6 billion in the third quarter of 2022 to Sh48.8 billion.
Similarly, revenue from exports of tea grew from Sh40.2 billion in the third quarter of 2022 to Sh50.1 billion in the third quarter of 2023 due to an increase in the quantity of tea exported. High inflation affected consumption and led to a decline in imports.
