Rising Imports Push Kenya’s Current Account Deficit to Ksh135B

Kenya’s current account deficit widened sharply in the third quarter of 2025 as imports continued to grow faster than exports, official figures show.

Data from the Kenya National Bureau of Statistics (KNBS) shows the current account shortfall expanded from Ksh 43.5 billion in Q3 2024 to Ksh 135.3 billion in Q3 2025. This wider gap was driven by a larger merchandise trade deficit and a smaller surplus in the services account.

Imports rose by Ksh 82.7 billion, outpacing a Ksh 48.0 billion increase in exports during the same period. Much of the higher import bill was due to increased purchases of industrial machinery, iron and steel, and road motor vehicles.

Despite the overall deficit widening, domestic exports did register modest growth. Exports grew 1.2 per cent, buoyed by higher earnings from animal and vegetable oils, which rose 24.3 per cent, and cut flowers, up 11.6 per cent. Other categories, such as articles of apparel and edible products,s also saw increases.

An economist noted, “While export growth in some sectors is encouraging, the pace is not yet enough to narrow the trade gap. Kenya continues to rely heavily on imported capital goods, which puts pressure on the current account.”

The shrinking surplus in the services account, which includes sectors like tourism, transport, and financial services, also contributed to the broader deficit picture.

Economy

Meanwhile, Kenya’s economy continued to grow, expanding by 4.9 per cent in the third quarter of 2025, up from 4.2 per cent a year earlier.

This growth was driven by rebounds in construction, mining, and agriculture, as well as strength in services and transport sectors.

The agriculture, forestry and fishing sector grew by 3.2 per cent, supported by increased milk production and higher cut flower exports, while construction activity rebounded strongly to 6.7 per cent after contracting the previous year.

“The growth in agriculture was mainly driven by increased milk production and flower exports,” the KNBS report said, reflecting resilience in core sectors of the economy.

Economic analysts say the stronger GDP performance shows Kenya’s ability to sustain growth amid external pressures, but the widening current account gap alongside rising imports and persistent fiscal imbalances highlights ongoing vulnerabilities that will require careful policy management.