Money Markets
The International Monetary Fund (IMF) managing director Christine Lagarde. Photo/FILE
By GEOFFREY IRUNGU
The International Monetary Fund (IMF) has warned of rising budget deficits and gaps between exports and imports. In its latest Africa Pulse edition, the fund notes that
reducing the two shortfalls is a major policy challenge for the Kenya,
Ghana and South Africa governments.
The current account, which shows the difference
between exports and imports, has hovered near 10 per cent of the gross
domestic product for more than two years. This is due to the low value
of exports as compared to imports.
“In this environment, reducing the twin fiscal and
current account deficits remains a major policy challenge for several of
the region’s frontier market countries, such as Ghana, Kenya and South
Africa,” says the report released last week.
Recent data from the Kenya National Bureau of Statistics (KNBS) shows the export-import gap is still widening.
“Merchandise trade deficit widened from Sh204.593
billion in the second quarter of 2013 to Sh262.431 billion in the same
quarter of 2014,’’ says KNBS.
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