Kenya: Fourth Reviews Under the Extended Arrangement under the Extended Fund Facility and under the Arrangement under the Extended Credit Facility, and Requests for Augmentation of Access under the Arrangement under the Extended Credit Facility, and Modifications of Quantitative Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Kenya
IMF Staff Country Reports, December 20, 2022
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- Kenya: Fourth Reviews Under the Extended Arrangement under the Extended Fund Facility and under the Arrangement under the Extended Credit Facility, and Requests for Augmentation of Access under the Arrangement under the Extended Credit Facility, and Modifications of Quantitative Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Kenya
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Bibliographic details
- Published: December 20, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400226045.002
Overview and context
- Kenya is navigating a turbulent global backdrop marked by volatile commodity prices, slowing growth in key trading partners, and constrained frontier market access to international capital markets.
- A smooth transition following the August elections demonstrated Kenya’s increasing institutional strengths.
- A multi-season drought has worsened food insecurity for vulnerable populations in arid and semi-arid regions and has kept food prices elevated.
Fiscal and revenue developments
- Strong tax overperformance in FY2021/22 helped cushion some of the external and domestic shocks.
- The administration of President Ruto eliminated petrol subsidies in their first week in office.
- Spending cuts in FY2022/23 extend to externally-financed projects.
Monetary policy and inflation
- Inflation has breached the central bank (CBK) target band.
- Monetary policy has been tightened by 175 basis points this year.
External position and financing
- Foreign reserves are adequate, but lower than previously projected given:
- shortfalls in FY2021/22 external public commercial and project financing,
- spending cuts in FY2022/23 also extending to externally-financed projects,
- prospects for continued challenging market conditions for frontier economies into 2023.
Key subjects and keywords
- Subjects: Debt sustainability analysis, External debt, Inflation, International organization, Monetary policy, Prices, Public debt, Revenue administration
- Keywords: Debt sustainability analysis, Global, Inflation, Kenyan authorities, monetary policy stance, policy objective, reinforcing Monetary, steadfast effort, target band
Content in this bundle
- 1kenea2022003