CEEMEA IN FOCUS Trip Notes from Kenya — Stronger BoP and Shilling Support; Wide Fiscal Deficits Likely to Persist

Research evidence excerpt

CEEMEA IN FOCUS Trip Notes from Kenya — Stronger BoP and Shilling Support; Wide Fiscal Deficits Likely to Persist

Economics Research

24 July 2026 | 3:38PM BST

CEEMEA IN FOCUS

Trip Notes from Kenya — Stronger BoP and Shilling Support; Wide Fiscal

Deficits Likely to Persist

This week (22-24 July), we organised a trip to Kenya, where we met policymakers, Ludovica Ambrosino

+44(20)7051-9222 |

political analysts and local market participants. marialudovica.ambrosino@gs.com

Goldman Sachs International

Our key takeaways from the trip were as follows: Andrew Matheny

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andrew.matheny@gs.com

n The external outlook remains broadly resilient, underpinned by solid reserves Goldman Sachs International

(US$14.1bn, ~6 months of import cover), large FX inflows from various sources,

and government-to-government oil arrangements with Saudi Arabia and the

UAE, which have eased near-term Dollar demand. On net, recent news on the

BoP has been positive and suggests upside risks to our US$12bn end-2026

projection, making us more confident on our baseline outlook for KES stability

and less concerned about depreciation risks.

n On the fiscal side, however, the deficit came in wider than expected at 6.7% of

GDP in the fiscal year that just ended (FY2025/26). This was significantly larger

than our estimate of Kenya’s debt-stabilising deficit (4-5% of GDP), and we

remain cautious on the durability of revenue-base gains, off-budget

securitisation risks, and likely pre-election slippage.

n On financing, the FY2026/27 programme is heavily tilted domestically

(~KES1.0trn net domestic), complemented by a substantial ~US$4bn external

pipeline spanning concessional (World Bank, AfDB) and commercial sources

(Samurai, Panda, Eurobond), with total net external financing over the next 6-12