NAIROBI, Nov. 25 (Xinhua) -- Kenya's budget deficit is projected to rise to 8.5 percent of gross domestic product (GDP) in the current financial year that ends in June 2021 compared to 8 percent recorded in the prior year due to the COVID-19 pandemic, a senior government official said on Wednesday.
Treasury Cabinet Secretary Ukur Yatani said in Nairobi that the government remains committed to pursuing a fiscal consolidation policy.
According to the Treasury, the implementation of the current budget continues to experience challenges emanating from revenue shortfalls and rising expenditure pressures.
"The shortfalls in government revenues are as a result of suppressed economic activities as a result of the pandemic, as well as the tax reliefs implemented in April to cushion people and businesses from the adverse effects of the pandemic," Yatani noted.
The national treasury said that the next budget is being formulated against a backdrop of the COVID-19 pandemic, which has adversely affected nearly all the world economies, Kenya included.
He revealed that the continuation of the pandemic is therefore a major setback in achieving sustainable financing of critical programs in the development agenda as revenue targets continue to lag behind.
"The capacity of the economy to generate additional resources to finance the budget has been severely affected by reduced economic activities," he revealed.