In the 2022/23 budget presented on Thursday by Treasury CS Ukur Yatani, the government said it expects its fiscal deficit to narrow to Sh862.5billion which is 6.2 per cent of the country’s GDP in the 2022/23 fiscal year.
Currently, the country’s fiscal deficit stands at Sh1 trillion which is 8.1 per cent of GDP. A fiscal deficit is a shortfall in a government’s income compared with its spending.
Ukur Yatani who spoke in Parliament while presenting this year’s budget said the fiscal deficit will be financed through net external financing of Sh280.7 billion equivalent to 2.0 per cent of GDP and net domestic financing of Sh581.7 billion equivalent to 4.2 per cent of GDP.
“We have re-prioritized public spending towards pro-poor expenditures in health, education and supporting the vulnerable segment of the population. In addition, we are leveraging on the Public Private Partnerships to fund public projects, support the private sector and narrow the fiscal deficit.” Ukur Yatani.
As part of its medium-term fiscal deficit policy, he said the government seeks to reduce the fiscal deficit to sh634million in the 2025/26 fiscal year.