Government of Kenya Unveils FY 2024/25 Budget Focused on Growth and Economic Transformation
The Government has released its Budget for the fiscal year 2024/25, detailing spending priorities and economic projections as mandated by the Public Finance Management Act, 2012.
Total Expenditure and Net Lending: Ksh. 3,992.0 billion
- Recurrent Expenditure: Ksh. 1,628.6 billion
- Interest Payments and Pensions: Ksh. 1,213.4 billion
- Development Expenditure: Ksh. 745.9 billion
- Contingency Fund: Ksh. 4.0 billion
- County Allocations: Ksh. 400.1 billion
Growth: The economy grew by 5.6% in 2023, up from 4.9% in 2022, driven by a rebound in agriculture and strong performances in key sectors like information, communication, and transportation. The forecast for 2024 is a 5.5% growth rate, supported by a robust services sector and lower global commodity prices.
Inflation: Inflation dropped to 5.1% in May 2024, down from a peak of 9.6% in October 2022, due to lower food and energy prices, currency appreciation, and effective monetary policies.
Currency Stability: The Kenya Shilling is stabilizing against major currencies, helped by positive market perception, Euro bond de-risking, and interbank market reforms.
The fiscal policy aims to support the Bottom-Up Economic Transformation Agenda (BETA) by reducing the fiscal deficit from 5.7% of GDP in FY 2023/24 to 3.1% by FY 2027/28. This will be achieved through revenue growth, spending cuts on non-priorities, and enhanced social safety nets.
To enhance productivity, the Government is investing Ksh. 16.3 billion in broadband connectivity and the Last Mile Electricity Connectivity Programme to improve the business environment.
This Budget reflects the Government’s dedication to economic transformation, infrastructure development, and fiscal responsibility, aiming for a stable and prosperous economic future.
