Tanzania Economic Outlook

July 17, 2018

Economic activity likely moderated in the first half of the year, following a strong 2017 in which the construction, and transport and storage sectors benefited from the government’s ongoing efforts to convert Tanzania into a regional trade hub. Available data for the January–April period shows that credit extension to the private sector was extremely weak due to the bulky stock of non-performing loans owned by the banking system. Moreover, the government continued to underspend budgeted development funds. On a positive note, in mid-June the World Bank approved a USD 455 million loan to help finance power projects, which should strengthen infrastructure investment.

Tanzania Economic Growth

Growth this year should be underpinned by a sustained expansion in the construction sector, together with robust investment growth in the hydrocarbon and transport sectors. However, subdued credit growth will weigh on the economy, and business investment could be discouraged by volatile policymaking regarding the mining sector. FocusEconomics panelists expect GDP to expand 6.4% in 2018, down 0.1 percentage points from last month, and 6.5% in 2019.

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	14.21	Jul 17
Exchange Rate	2,280	Jul 17
Stock Market	1.5	Jul 17

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