The economy is projected to grow by 5.3% in both 2025 and 2026, Mbadi told parliament while presenting his budget for the 2025/26 fiscal year.

"This growth is premised on a stable macroeconomic environment over the medium term," he said.

The fiscal deficit is forecast at 4.8% of gross domestic product compared with 5.7% in 2024/25, while overall spending is expected to reach 4.29 trillion Kenyan Shillings ($33.27 billion) during the period, Mbadi added.

The budget is aimed at boosting revenues to service debt while avoiding tax measures that triggered the kind of deadly protests that rocked East Africa's biggest economy last year.

While Mbadi presented the budget, protests intensified in the capital following the death in custody of a political blogger, with vehicles set ablaze and police firing tear gas to disperse the demonstrators.

President William Ruto's administration has been struggling to narrow the fiscal deficit and govern under a heavy total debt-to-GDP ratio of around two-thirds, well above the 55% level considered a sustainable threshold.

The government is seeking new sources of funding after last year's countrywide protests forced it to pursue austerity measures and scrap planned tax hikes worth more than 346 billion Kenyan shillings ($2.7 billion).

"Kenyans cannot bear more tax," Mbadi said on Wednesday ahead of his presentation. "For the first time, we have not added taxes in the current finance bill as has been the case before."

--Reuters--