Nairobi, April 20 -- The International Monetary Fund (IMF) has projected a wider fiscal deficit for Kenya, in the wake of war in the Middle East, signalling increased borrowing to plug the expanded budget hole.

The multilateral lender expects the deficit to deteriorate to 6.4 percent of gross domestic product (GDP) in 2026 from an initial October 2025 estimate of 5.6 percent.

A rise in the price of petrol at the pump is just the beginning in the wake of Iran's closure of the Strait of Hormuz that has caused energy prices to surge.

Food production looks set to be damaged by fertiliser shortages which will lead to further inflation. The spike in the price of the commodities will see governments in emerging countries make interventions li...