Kenya’s economy expanded by 5.3% in the first quarter of 2023, a decline from 6.2% in the corresponding quarter of last year.
During the same period, Kenya’s stock of external public debt grew by 15.5% from KSh 4.08 trillion at the end of March 2022 to KSh 4.71 trillion at the end of the first quarter of 2023. The largest portion of this debt comes from multilateral loans which rose from KSh 1.81 trillion to KSh 2.2 trillion.
With Kenya’s public debt hitting the KSh 10 trillion ceiling, the national treasury’s appetite for external borrowing has not slowed.
According to the National Treasury, Kenya’s overall balance of payments position worsened to KSh 127.8 billion in Q1 2023. Over the same period, the Kenya Shilling has also depreciated by 14.8% from KSh 132.33 in Q1 2023 to the US dollar from KSh 114. 95 in Q1 2022.
Export earnings increased by 9.4% to KSh 233 billion, a faster growth compared to a 2.1% increase in imports in Q1 2023 to KSh 536.6 billion. There was an improvement in export earnings from tea, iron and steel, titanium ores, and concentrates during Q1 2023;
Kenya’s export earnings boosted by tea
In Q1 2023, expenditure on imports amounted to KSh 589.8 billion a decline of 0.5% compared to the same quarter in 2022. This was due to a decrease in imports of machinery, iron, and steel as well as medical and pharmaceutical products, Imports of oil and lubricants rose from KSh 127.2 billion in Q1 2022 to KSh 145.7 billion in Q1, 2023, accounting for the largest share of Kenya’s import bill, at 24.7% of total import expenditure.
Africa remained the major destination for Kenya’s exports accounting for over 43.1% of total exports from KSh 82.2 billion in Q1 2022 to KSh 100.2 billion in Q1 2023. Earnings from exports to Asia increased from KSh 53 billion in Q1 2022 to KSh 58.2 billion in Q1 2023, a 9.8% growth that was largely driven by increased exports of tea.
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