Tanzania Economic Outlook

November 13, 2018

According to recent reports from the Central Bank, economic activity continued to expand solidly in the third quarter. Credit growth strengthened further in August, fueled by a jump in personal loans and a significant acceleration in credit extension to the manufacturing sector. However, the current account deficit widened sizably in annual terms in the year ending August. While exports remained broadly stable, imports expanded significantly, boosted by surging purchases of capital goods from abroad due to soaring infrastructure spending. The expansion of development expenditures was reflected in fiscal data, which shows that total government spending jumped by over 30% in June in annual terms.

Tanzania Economic Growth

Next year, the economy should continue to expand solidly, supported by sustained infrastructure spending and growth within the services sector on the back of growing tourist inflows. That said, the uncertain policy environment represents a downside risk to the mining sector, and thus on growth. FocusEconomics panelists expect GDP to expand 6.5% in 2019, which is unchanged from last month’s forecast, and 6.4% in 2020.

Tanzania Economy Data

	2013	2014	2015	2016	2017
Population (million)	45.8	46.7	47.7	48.7	50.0
GDP per capita (USD)	957	1,031	916	975	-
GDP (USD bn)	43.9	48.2	43.7	47.5	-
Economic Growth (GDP, annual variation in %)	7.3	6.9	7.0	7.0	-
Consumption (annual variation in %)	8.5	4.5	1.4	16.6	-
Investment (annual variation in %)	4.5	12.8	10.6	12.4	-
Fiscal Balance (% of GDP)	-3.9	-3.0	-3.3	-2.2	-
Public Debt (% of GDP)	30.9	33.8	37.2	38.0	-
Money (annual variation in %)	17.0	13.4	5.3	10.4	-
Inflation Rate (CPI, annual variation in %, eop)	5.6	4.8	6.8	5.0	4.0
Inflation Rate (CPI, annual variation in %)	7.9	6.1	5.6	5.2	5.3
Policy Interest Rate (%)	16.01	15.75	16.39	15.66	18.62
Exchange Rate (vs USD)	1,587	1,733	2,160	2,181	2,240
Exchange Rate (vs USD, aop)	1,617	1,665	2,040	2,186	2,237
Current Account (% of GDP)	-11.4	-10.0	-8.4	-4.6	-
Current Account Balance (USD bn)	-5.0	-4.8	-3.7	-2.2	-
Trade Balance (USD billion)	-5.8	-5.7	-4.5	-2.8	-
Exports (USD billion)	5.3	5.2	5.3	5.7	-
Imports (USD billion)	11.0	10.9	9.8	8.5	-
Exports (annual variation in %)	-10.7	-1.2	2.4	6.5	-
Imports (annual variation in %)	6.9	-1.0	-9.8	-14.0	-
International Reserves (USD)	4.7	4.4	4.1	4.3	5.9
External Debt (% of GDP)	30.1	30.2	35.3	36.5	-

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Tanzania Facts

	Value	Date
Bond Yield	14.78	Nov 14
Exchange Rate	2,295	Nov 14
Stock Market	1.4	Nov 06

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