Treasury to cut 2015/16 local borrowing by a quarter

February 18, 2016 7:39 AM

The expenditure cuts, which amount to 50-60 billion shillings, had been considered carefully to ensure they do not hurt the country's economic prospects.

Kenya's Cabinet Secretary of National Treasury (Finance Minister) Henry Rotich in a file photo. REUTERS/Noor Khamis

Kenya will cut its planned domestic borrowing for the 2015/16 (July-June) fiscal year by about a quarter to 168 billion shillings ($1.65 billion), on the back of expenditure cuts of 1 percent of GDP, its finance minister said on Thursday.

The plan, contained in a supplementary budget that is yet to be approved by the cabinet and the national assembly, will reduce the budget deficit to just under 7 percent of the gross domestic product, from the initial target of 8.7 percent, Henry Rotich told Reuters.

"It (deficit) is coming down from about 8.5 percent to about 6.9 percent," he said.

"We have done very careful cuts so it doesn't impact on the growth," Rotich said.

($1 = 101.7000 Kenyan shillings)