Kenya’s current account deficit narrowed to 4.7% of the GDP at the end of November 2020, from 5.4% of the GDP a year earlier according to provisional data from the Central Bank of Kenya. The current account balance measures a country’s trade balance and financial flows with other countries. A current account deficit shows that the value of the nation’s imports exceeds the value of its exports.
Central Bank attributes the drop in current account deficit to resilient earnings from exports, increased remittances and savings from oil imports.
Tea, Coffee, vegetables, and Flower exports increased significantly in the second half of 2020, shortly after Kenya eased movement restrictions. Remittances also went up to $1.33 billion in the five months from July to November 2020, compared to $1.096 billion in the corresponding period in 2019.
At the end of the first half of 2020, the current account balance reduced to a deficit of KSh 82.2 billion from a deficit of KSh 136.9 billion in the same period in 2019. The value of imports in the first half of 2020 fell by 23% to KSh 326.5 billion from KSh 425 billion a year earlier. Exports decreased to KSh 139.1 billion from KSh 147.2 billion in the period under review.