Kenya is looking for ways to bring its budget deficit for the current financial year close to its original target after a slump in its currency forced its upward revision, a finance ministry official revealed on Wednesday.

The East African nation’s government revised its spending plans for the 2023/24 financial year to June 2024 in late October, after currency weakening increased foreign debt repayments by 1 per cent of gross domestic product.

In the revised budget, the fiscal deficit was increased to 5.5 per cent of GDP from the initial 4.4 per cent, eliciting concerns about the government’s ability to stabilise public debt.

“We are still looking around to see how we can bring this 5.5 to 4.7 per cent as a minimum,” Musa Kathanje, the director of macro and fiscal affairs at the ministry, told an event convened to prepare the budget for the 2024/25 financial year.

Kenya’s central bank raised its benchmark lending rate by 200 basis points to its highest level in more than a decade last week, to try to stabilise the exchange rate.

The tighter monetary stance will work, Finance Minister Njuguna Ndung’u told the same budget preparation forum, helping to stabilise the macroeconomic fundamentals.

Officials also want to bring down the inflation rate, which has been stuck at close to 7 per cent for the last three months, to around 5 per cent.

The government expects the economy to grow by 5.5 per cent this year and by a similar rate next year, finance ministry officials said. The economy grew 4.8 per cent in 2022.

• A Reuters report