In the first quarter of 2017, the current account deficit more than doubled to KSh 123.2 billion from KSh 43.4 billion in the first quarter of 2016 as shown in Table 1. International merchandise trade which includes exports and imports of goods registered a deficit of KSh 259.6 billion in the quarter under review, an increase of 67.3 per cent from a deficit of KSh 155.2billion in the first quarter of 2016. This was mainly on account of a decline of 2.3 per cent in exports to KSh 152.0 billion and an increase of 32.4 per cent in imports on f.o.b basis to KSh 411.6 billion in the first quarter of 2017.
International trade in services posted a surplus of KSh 50.9 billion in the quarter under review compared to a surplus of KSh 38.1 billion in the corresponding quarter of 2016. Service receipts increased by 18.9 per cent to KSh 131.7 billion while service payments increased by 11.3 per cent to KSh 80.9billion in the first quarter of 2017. The expansion in the service receipts could be attributed to increased travel inflows following improved tourism arrivals in the quarter under review. Diaspora remittances increased by 5.5 per cent to KSh 45.1 billion in the first quarter of 2017 from KSh 42.8 billion in the first quarter of 2016.
1.2. Net financial inflows more than doubled from a surplus of KSh 133.1billion in the first quarter of 2016 to a surplus of KSh 288.0 billion in the first quarter of 2017. This was mainly on account of increased disbursements to the general Government in form of project and commercial loans during the quarter under review. Gross official reserves increased by 8.9 per cent from KSh 792.4 billion as at the end of first quarter of 2016 to KSh 863.0 billion as at the end of the first quarter of 2017. These developments resulted into an improvement in the overall balance of payments position from a surplus of KSh 26.3 billion in the first quarter of 2016 to a surplus of KSh 84.2 billion in the quarter under review.
[wpdm_package id=4330 template=”link-template-calltoaction3.php”]