The Government Wednesday dismissed reports that the country was faced with a budget crisis and said indicators were that it will achieve higher growth than planned.

Finance minister, Amos Kimunya said although the violence in months of January and February had slowed down the economy, signs were that the country was back on track.

National Development minister, Wycliffe Oparanya had on Tuesday said the Government faced a budget crisis, with an estimated deficit of Sh200 billion, and would need more donor support.

Revise growth rate

But speaking during the signing of financial agreements with Germany for grants and loans totalling to 69.46 million Euros (Sh6.6 billion) in his office, Kimunya said data suggested that the economy was on the recovery.

The funds received Wednesday will go to water, irrigation, primary education and health sectors in parts of the country.

"The indicators show that the year will turn out to be better than the worst case scenario earlier anticipated. I am happy to tell you that I might have to revise the growth rate" he said.

Surpassed

Mr Kimunya said Kenya Revenue Authority had surpassed its revenue collection for the month of April by Sh 3 billion, the highest in the history of the country, and an indicator that the economy was picking up.

He said the economy had been projected to achieve 8 per cent growth this year but had been scaled down to between 4.5 per cent to 6 per cent after disruption following post-election violence.

Mr Kimunya said the country needed short term recovery funds and expressed confidence that Germany and other donors will come to the aid of the country.

It is estimated that property worth more than Sh200 billion was destroyed during the violence.

The minister said country needed Sh27 billion to solve the problems of displaced people in parts of the country.

Head of East Africa Department in the ministry for economic co-operation and development, Dr Gabriele Geir said their future funding will be dictated by sustained reforms in the country.

"What happened was shocking because it was not expected. Some people in Germany have been discussing on whether it was important to continue funding Kenya," she said.