Kenya’s current account deficit widened sharply in the third quarter of 2025 to roughly US$1.05 billion, it’s largest in three years, as growing imports and rising government debt-servicing costs outpaced export earnings, official data show.
The gap in the balance of payments more than tripled from the same period in 2024, when it stood at around US$337 million, according to figures from the Kenya National Bureau of Statistics (KNBS).
The deterioration reflects structural pressure on the economy, with a larger merchandise trade deficit, a shrinking surplus in services and higher external debt costs. The current account shortfall indicates that Kenya is spending significantly more foreign currency on goods, services and debt obligations than it is earning from exports and remittances.
In the third quarter of 2025, Kenya’s merchandise trade deficit expanded as imports surged relative to exports. While export earnings rose modestly, the value of imports increased sharply, widening the trade gap.
Exports grew on the back of increased shipments of products such as animal and vegetable oils and cut flowers. Regional markets in Africa and Europe absorbed much of the additional exports, while shipments to Asia and the Americas contracted.
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However, services-sector earnings and net inflows from travel, transport and government services declined compared with the previous year, reducing the overall surplus in the services account. Diaspora remittances provided some support but were not enough to counterbalance the larger deficits in goods and services.
Kenya’s external financing position also weakened in the quarter, with net external financing falling sharply and foreign exchange reserves drawn down to meet obligations. Meanwhile, the government’s external public debt stock rose to about US$43.6 billion, driven largely by increased international sovereign bond issuances earlier in 2025.
Economists say the widened current account deficit underscores persistent challenges for Kenya’s balance of payments, requiring sustained export growth and efforts to manage import demand and debt costs.
