Kenya has cut its domestic borrowing target for the 2011/12 fiscal year to 62.1 billion shillings (747 million dollars) from 119.5 billion.
The cut is due to a 600 million dollars syndicated loan due to be concluded in April, according to a budget policy statement.
The 2012 budget statement said the domestic borrowing target would be 106.7 billion shillings in the 2012/13 fiscal year that starts in July.
The remaining 60.7 billion of the projected budget deficit is to be covered by net external financing.
The statement said Kenya's economy was estimated to have grown by 4.5 per cent in 2011 and that growth would accelerate to 5.2 per cent this year, lower than previous forecasts.
The forecast for 2012 growth has been ratcheted down from 5.7 per cent in last year's budget statement. In January, former finance minister Uhuru Kenyatta said the economy would grow by 5.3 per cent this year.
The 2012 Budget Policy Statement said the growth projections were 5.5 per cent for the 2012/13 fiscal year, rising to 5.9 per cent in 2013/14 and 6.3 per cent in 2014/15.
It said the risks to the outlook included a further weakening of global economic growth and possible dry weather.
"Also, reversal in the current easing of international oil prices may fuel inflation and weaken growth," it said.
The statement said the current account deficit stood at about 11 per cent in the current fiscal year, but was expected to decline to 6.1 per cent in 2014/15.
"We expect the easing of public and private demand to put less pressure on the current account.
``Also, we expect continued flow of remittances which has recently played a key role in the economy," the statement said.(Reuters/NAN)