Kenya walks fiscal tightrope in $37 billion budget

Kenya's Treasury presented a Ksh4.82 trillion ($37.2 billion) budget for 2026/27, a 4.1% increase from the previous year. The fiscal deficit of Ksh1.11 trillion will be financed through external borrowing (Ksh116.2 billion) and domestic borrowing (Ksh995.7 billion). Ordinary revenue is projected at Ksh2.98 trillion, but the African Development Bank has revised Kenya's growth forecast down to 4.6% due to the Middle East conflict. Interest payments on public debt have risen to over 25% of the budget, squeezing development spending.