The narrowing deficit was aided by a five percent drop in merchandise trade fall from Sh248 billion to Sh238 billion in the quarter to March.
Expenditure on imports dropped to Sh397.14 billion over the quarter compared to Sh411.14 billion spent over similar quarter a year ago.
Kenya’s quarter-one current account deficit dropped to the lowest level since the first quarter of 2016 at Sh78.84 billion this year according to the latest balance of payments numbers by the Kenya National Bureau of Statistics.
Balance of payments show financial transactions between a country and the rest of the world. The narrowing deficit was aided by a five percent drop in merchandise trade fall from Sh248 billion to Sh238 billion in the quarter to March.
“The narrowing of the current account deficit was supported by increase in net service inflows and decrease in merchandise trade deficit,” said the report.
Expenditure on imports dropped to Sh397.14 billion over the quarter compared to Sh411.14 billion spent over similar quarter a year ago.
“This was mainly on account of declines in the value of maize, iron and steel imports by 82.4 percent and 15.8 percent to Sh1.1 billion and Sh22.4 billion, respectively,” said the KNBS.
Export receipts dropped by Sh1.5 billion in the first quarter to Sh158 billion as a result of lower tea, titanium ore and concentrates inflows.
Receipts from services such as tourism, transfer of skills and other intangibles jumped 14.6 percent to an all-time high of Sh149.5 billion from Sh130 billion in the first quarter of 2018.
Over the period, diaspora remittances, which play a key role in stabilising the shilling were relatively high and stable at Sh67.86 billion, growing three percent.
Capital account, which measures the balance in capital exchanges between a country and the rest of the world, shrank 50 percent to Sh4.25 billion in the first quarter compared to a surplus of Sh8.4 billion in the first quarter of last year.
The financial account surplus was cut by 71 percent to Sh95 billion from Sh333 billion reported at the end of the first quarter of last year.
The overall balance of payments registered a surplus of Sh25.5 billion in the period compared a Sh205.5 billion surplus in the first quarter of 2018.
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