The original estimate was Sh275.7 billion but this was burst last week as the borrowing hit Sh287.7 billion.
The increased domestic borrowing put together with external borrowing will put the total deficit for the year at Sh620.8 billion.
Government borrowing for the fiscal year ending this month has been raised by an Sh18.1 billion to Sh293.8 billion.
The original estimate was Sh275.7 billion but this was burst last week as the borrowing hit Sh287.7 billion.
According to the Budget Policy Statement, the increased domestic borrowing put together with external borrowing will put the total deficit for the year at Sh620.8 billion.
“The deficit, inclusive of grants, is therefore projected at Sh620.8 billion (equivalent to 7.2 per cent of GDP). Borrowing from the domestic market is projected at Sh293.8 billion and external borrowing at Sh323.2 billion,” said the BPS.
Investment bankers at Kestrel Capital said in an update that the original estimate had been surpassed by mid last week, noting that approximately Sh1.365 trillion has been raised against maturities of Sh1.077 trillion — giving a difference of Sh287.7 billion.
“The Draft 2018 Budget Policy Statement indicated that government fiscal projections for Fiscal Year 2017/18 had resulted in a revised domestic borrowing target from the forecasted Sh275.7 billion to Sh293.8 billion,” said Kestrel Capital.
Other analysts indicated that the extra borrowing could be hit with the 25-year Treasury bond that has already been floated in the market.
The bond is seeking to raise Sh40 billion with a coupon rate of 13.4 per cent.
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