The International Monetary Fund has raised Kenya's risk of debt distress to high from moderate due to the effects of Covid-19 in the country.
In an assessment published on Monday, May 11, IMF stated that Kenya's debt stood at 61.7% of GDP as at the end of 2019 from 50.2% at the end of 2015.
"The risk of debt distress has moved to high from moderate due to the impact of the global Covid-19 crisis which exacerbated existing vulnerabilities,” IMF stated.
The fund added that the Covid-19 pandemic is expected to significantly reduce growth in 2020, with a large impact on agricultural exports, services, remittances, and the financial account thus weakening the external position.
"The authorities are taking measures to combat the spread of the virus and mitigate its adverse effects on the economy and vulnerable segments of the population," the fund added.
Kenya's debt stood at 61.7 per cent of gross domestic product at the end of 2019 up from 50.2 per cent at the end of 2015.
Last week, IMF approved a disbursement of Ksh 73.9 billion to be drawn under the Rapid Credit Facility to support the authorities’ response to the COVID-19 pandemic.
The loan was the second the country had received from Bretton Woods institution since the coronavirus pandemic hit the country.
"This will help to meet Kenya's urgent balance of payments need stemming from the outbreak of the Covid-19 pandemic," read the statement in part.
The fund stated that the loan would help Kenya to provide the budget financing needed to respond to the pandemic.
