Moody's Warns Kenya Deficit May Hit 7.1% as 2027 Election Spending Rises
Updated
Updated · Kenyans.co.ke · Jul 21
Moody's Warns Kenya Deficit May Hit 7.1% as 2027 Election Spending Rises
1 articles · Updated · Kenyans.co.ke · Jul 21
Summary
Moody's said Kenya's fiscal deficit could reach 7.1% of GDP in fiscal 2027, missing the Treasury's 5.5% target and staying near the agency's 7.2% estimate for 2026.
Weaker revenue collection, pre-election overspending and heavier use of costly domestic borrowing are driving the gap, Moody's said in its latest sovereign rating review.
Ksh41.3 billion has been allocated to the electoral commission for the 2027 cycle, but the IEBC says it needs Ksh74.8 billion, leaving a Ksh33.5 billion shortfall likely to require supplementary budgets.
Moody's kept Kenya at B3 with a stable outlook, but said debt affordability remains strained because interest payments absorb about one-third of government revenue.
Kenya's roughly 70% debt-to-GDP ratio, 6 months of import cover and expected 5% medium-term growth still provide resilience, even as chronic revenue underperformance weakens fiscal policy.