Kenya’s current account deficit ratio widened to 3.17% of GDP from 1.12% in Q3 2024, reaching KSh 135.3Bn against GDP of KSh 4.26Tn in Q3 2025.
The widening broke a period of consolidation seen from 2023 to 2024 when most ratios stayed below 2% for several consecutive quarters.
The latest data confirms imports grew faster than exports and the services buffer weakened sharply.
The economy added KSh 48.0Bn in export earnings in Q3 2025 whilst also adding KSh 82.7Bn in import expenditure in the same quarter. This mismatch widened the merchandise trade deficit to KSh 355.8Bn from KSh 321.1Bn on free onboard valuation basis. Higher spending on industrial machinery, iron and steel, and road motor vehicles drove the import side. Exports expanded but at a slower pace and failed to counter the shock.
The services account lost strength and amplified the ratio jump. Net services surplus fell to KSh 57.2Bn from KSh 100.6Bn in Q3 2024. Travel inflows reduced. Transport inflows reduced. Government goods and services inflows reduced. The decline removed a critical cushion and allowed the overall gap to widen faster.
Remittances remained flat and offered limited relief with diaspora flows edging up to KSh 165.5Bn from KSh 164.9Bn, an increase of only KSh 0.6Bn. The secondary income account still declined to KSh 239.8Bn from KSh 257.7Bn as other transfers fell and offset the remittance stability. Primary income deficit narrowed slightly to KSh 76.5Bn from KSh 80.8Bn and provided small support.
External financing weakened and forced reserve use. Net external financing declined by 57.8% from KSh 60.9Bn in Q3 2024 to KSh 25.7Bn in Q3 2025. Rising government debt service drove the stress, particularly on general government liabilities. Reserve assets recorded a drawdown of KSh 63.7Bn compared to an increase of KSh 17.8Bn in the prior year quarter. The direction change signals heavier use of reserves to settle obligations and reduces policy space for CBK.
Q3 patterns over the decade show repeated stress with third quarters posting higher deficit ratios than other quarters when the trade gap expands and the services surplus shrinks. The data from 2016 to 2025 confirms this occurred in five of ten years, including 2017, 2020, 2021, 2022 and 2025. Absolute deficits matter for financing risk. Percentage ratios matter for stability risk. GDP growth alone does not repair the gap.
Kenya's Trade Deficit Triples, Piling Pressure On Foreign Reserves
