Tanzania
Tanzania has good prospects for economic growth, import cover levels are comfortable, and political risk is relatively low. However, these strengths are offset by weak socioeconomic indicators, structurally large current account and budget deficits, and rising debt levels. Another problem is that protectionist policies may begin to affect investment into the mining and energy sectors.
GDP growth moderated in Q1 2019, recorded at 6.6% y-o-y from 7.0% y-o-y in the previous quarter. The decline in real GDP growth was mainly due to weaker performances by the industrial and services sectors. Looking ahead, we expect GDP growth to ease from 7% in 2018 to 6.1% this year as erratic economic policies and the perceived hostility towards large foreign investors continue to dampen foreign investor appetite. Although headline inflation remains under control (3.6% y-o-y in August), inflationary pressure is expected to intensify in H2 2019 as favourable base effects (stemming from food prices) dissipate. Trade balances should get some reprieve from stronger tourism-related receipts this year. Nevertheless, the expected uptick in capital goods imports related to the nascent hydrocarbons industry should inflate the import bill and, in turn, widen the current account deficit. Likewise, Tanzania’s budget deficit is forecast to widen as we expect a notable increase in public spending this year. (Source: Tanzania Annual Country Profile, published September 2019)
Macroeconomic Data
(2018)
|
Fiscal Balance (as a % of GDP) |
-1.9 |
|
Consumer Price Index (% change y-o-y, avg) |
3.5 |
|
Current Account Balance (as a % of GDP) |
-3.3 |
|
Real GDP (annual % change) |
7.0 |
|
GDP per Capita, US$ |
1,012.6 |
|
Import Cover (months) |
6.1 |
|
Population, million |
56.4 |
| Total External Debt (as a % of GDP) |
35.3 |