Kenya will target a budget deficit of 4.9 percent of GDP for the 2026/27 fiscal year as the government continues its efforts to strengthen fiscal discipline, according to a senior finance ministry official. The projection is outlined in the Treasury’s latest Budget Review and Outlook Paper, which sets the tone for medium-term economic planning. This update was reported by Reuters.
The Treasury document shows that the government intends to finance the shortfall with 241.8 billion Kenyan shillings in external borrowing and 775.8 billion shillings through domestic sources, reflecting a continued shift toward balancing funding options as borrowing costs rise. These figures are contained in the official fiscal paper published by the National Treasury.
Treasury Principal Secretary Chris Kiptoo noted that the administration remains committed to narrowing the deficit while safeguarding priority spending, a position he shared in comments cited by Reuters. He explained that the target aims to support economic stability at a time when Kenya faces tightening global financial conditions.
Economic analysts referenced by AllAfrica have observed that Kenya’s debt trajectory remains a key concern, even with the government’s consolidation efforts. The 4.9 percent target underscores Nairobi’s attempt to maintain credibility with international lenders while continuing to invest in infrastructure and essential public services.
