• Budget to reduce deficit by 35% over previous year
• Outcry over tax measures accompanying budget

NAIROBI, June 13 (Reuters) - Kenya's 2024/25 budget is aimed at tackling the country's debt while protecting its fragile economic recovery at the same time, Finance Minister Njuguna Ndung'u said on Thursday.

Ndung'u is due to present the budget later to parliament.

In a statement after a ministerial cabinet meeting on Thursday ahead of the budget presentation, the presidency said that the budget will have a smaller deficit than the one for 2023/24.

In April, the finance ministry forecast that economic growth would increase to 5.5% this year from 5.6% in 2023.

"The budget today is going to emphasise the policies that we need to strengthen ... to support that fragile growth, that fragile economic recovery," he told reporters.

"We want to make sure that we revive the economy so that it can generate jobs for the youth. We want to revive the economy so that we can pay our debt. We have been buffeted by that," he added.

Total public debt stands at an estimated 68% of GDP for fiscal 2023/24, and is expected to fall to 64.8% in 2024/25, according to the World Bank.

The East African nation sold a $1.5 billion international bond in February at a premium to fund the buyback of a large portion of a $2 billion bond maturing in June.

Before that, investors had feared Kenya might not be able to repay the bond due to its strained public finances.

Kenya's economy is largely driven by agriculture, manufacturing, transport and storage, financial and insurance services and real estate.

Last week, parliament approved overall spending for the year at 4 trillion shillings ($31 billion), up from the 3.75 trillion shillings the minister presented last June for the 2023/24 year. That budget was later adjusted to 3.85 trillion shillings.

The presidency said in its statement the 2024/25 budget sought to lower the deficit to 597 billion Kenyan shillings ($4.65 billion) from 925 billion shillings in the year to end-June.

The 2024/25 budget will be accompanied by the Finance Bill 2024, a separate law outlining revenue-raising proposals which many critics say some could cripple sectors including financial and internet services, transport, manufacturing and retail.

The proposals have drawn strong resistance from the public, bankers and manufacturers, as well as from the Law Society of Kenya, which stated its views to a parliamentary committee reviewing the measures.

President William Ruto has said the measures are aimed at reducing Kenya's reliance on borrowing to fund its budget.

Last week, the central bank governor said Kenya will use part of a $1.2 billion World Bank budget support loan to make a payment of roughly $500 million on a Eurobond maturing this month.

($1 = 128.5000 Kenyan shillings)

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https://www.reuters.com/markets/kenya-eyes-smaller-deficit-budget-aimed-protecting-economic-recovery-2024-06-13/