Tanzania Economic Forecast

Tanzania Economic Outlook

August 25, 2020

Economic activity likely contracted in the second quarter, following an over-two-year-low growth rate in Q1. The external sector was hit hard as exports declined in Q2 and tourist arrivals dropped in June due to foreign travel restrictions. However, despite the severity of the pandemic, few measures were implemented in the country, and since July they have all been lifted. This relaxed approach should have softened the second quarter’s decline somewhat. In Q3, momentum is expected to be slowly picking up, with the reopening of borders and businesses, although activity is likely to remain somewhat muted. News suggests that tourism—a key contributor to GDP—is rebounding, as international flights have resumed thanks to the easing of restrictions abroad. Moreover, the price for gold—the country’s key export commodity—reached a new record high in early August.

Tanzania Economic Growth

Growth is set to take a sharp hit this year. Trade and tourism will suffer, largely due to restrictions abroad to contain the pandemic, which will harm foreign demand and spill over into domestic activity. A relaxed Covid-19 health response, modest fiscal spending packages and extreme weather conditions cloud the outlook. FocusEconomics panelists project GDP to grow 2.3% in 2020, which is up 0.3 percentage points from last month’s estimate. In 2021, GDP is seen expanding 5.9%.

Tanzania Economy Data

2015 2016 2017 2018 2019
Population (million)50.051.553.154.756.3
GDP per capita (USD)9259621,0001,039-  
GDP (USD bn)46.349.653.156.8-  
Economic Growth (GDP, annual variation in %)6.26.96.87.0-  
Consumption (annual variation in %)6.31.14.86.3-  
Investment (annual variation in %)7.116.015.815.5-  
Fiscal Balance (% of GDP)-3.2-2.1-1.2-1.9-  
Public Debt (% of GDP)37.137.037.738.6-  
Money (annual variation in %)13.45.310.43.811.8
Inflation Rate (CPI, annual variation in %, eop)6.85.04.03.33.8
Inflation Rate (CPI, annual variation in %)5.65.25.33.53.4
Exchange Rate (vs USD)2,1602,1812,2402,3002,298
Policy Interest Rate (%)16.0016.009.007.007.00
Exchange Rate (vs USD, aop)2,0402,1862,2372,2772,307
Current Account (% of GDP)-9.7-5.5-3.4-3.9-  
Current Account Balance (USD bn)-4.5-2.7-1.8-2.2-1.6
Trade Balance (USD billion)-5.0-3.6-3.0-3.6-3.4
Exports (USD billion)4.84.94.54.45.6
Imports (USD billion)9.88.57.68.19.0
Exports (annual variation in %)-7.11.0-7.4-1.525.4
Imports (annual variation in %)-9.8-14.0-10.86.811.8
International Reserves (USD)4.14.35.95.05.6
External Debt (% of GDP)33.032.734.732.7-  

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Tanzania Facts

Value Change Date
Bond Yield14.730.0 %Dec 31
Exchange Rate2,3000.0 %Jan 01
Stock Market1.20.0 %Jan 06

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