Kenya's Ruto proposes spending cuts after nationwide protests

NAIROBI, July 5 (Reuters) - Kenyan President William Ruto on Friday proposed spending cuts and additional borrowing in roughly equal measure to fill a nearly $2.7 billion budget hole caused by his withdrawal of planned tax hikes in the face of nationwide protests.

Ruto scrapped the finance bill containing the tax increases in response to mass, youth-led demonstrations that have created the biggest crisis of his two-year-old presidency.

At least 39 people were killed in clashes with the police and some demonstrators briefly stormed parliament last week.

Ruto said in a televised address that he would ask parliament for spending cuts totalling 177 billion shillings ($1.39 billion) for the fiscal year that began this month and that the government would increase borrowing by about 169 billion shillings.

The president has been caught between the demands of lenders such as the International Monetary Fund to cut deficits, and a hard-pressed population reeling from rising living costs.

Analysts have said the bill's withdrawal is likely to result in Kenya missing targets in its IMF programme, although the government does not have debts coming due for which it urgently needs cash.

Kenya's budget deficit is now projected ...
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