Tanzania Economic Update

Abstract

With external conditions benign in 2019, Tanzania’s economic growth remained solid. According to official data, GDP growth through the first three quarters of 2019 was 6.9 percent, close to the 2018 official rate of 7.0 percent. Leading the way were mining, construction, and transport services. Inflation through the year was low and stable, the balance of payments was healthy, and the current account deficit (CAD) narrowed. Headline inflation was 3.8 percent by year end, well below the authorities’ ceiling of 5 percent. Higher exports of gold and manufactured goods helped improve the CAD from 3.8 percent of GDP in 2018 to 3.0 percent. Imports rose more slowly, with intermediate goods recording the highest growth as oil imports went up. The CAD was funded primarily by external borrowing. At year end, official gross reserves reached US$5.6 billion, enough to cover 6.4 months of imports of goods and services and comfortably above the government’s goal of 4 months coverage.