NAIROBI: Kenya expects a fiscal deficit at 5.7% of gross domestic product in its 2022/23 (July-June) budget versus 7.4% in 2021/22, a Finance Ministry document showed.

The document seen by Reuters on Wednesday affirmed an earlier economic growth forecast of 6.0% this year. The economy contracted 0.3% in 2020.

In August, the ministry had projected a 5.6% deficit in 2022/23. It is holding public hearings on the budget on Wednesday.

The ministry document said that, to fill the budget gap, it forecast net domestic financing of 408.1 billion shillings ($3.7 billion), or 3.0% of GDP, and net external financing of 367.8 billion shillings, or 2.7% of GDP.

Overall spending and net lending will stand at 3.23 trillion shillings in 2022/23 from 3.0 trillion shillings in the fiscal year to the end of June 2022.

Kenyan shilling seen hurt by strong dollar appetite

The East African nation, whose economy is still reeling from the negative effects of COVID-19, is bringing its budget-making timetable forward because of a general election due next August. The budget will be presented in March instead of the usual date in June.