According to their latest forecast reports the African Development Bank (AfDB) is projecting the economic growth of 5.3 percent, while the International Monetary Fund (IMF) and the World Bank are projecting the growth rate of 6.1 percent and 5.1 percent respectively.
The highest real GDP forecast of the Tanzanian economy is by Moody’s Analytics with 7 percent, Citigroup Global Markets by 6 percent, Allianz at 5.6 percent and Standard Chartered forecast is at 5.1 percent.
The sub-Saharan Africa consensus forecast report for August by the Barcelona based FocusEconomics also says the Tanzanian economy likely delivered another solid performance in the first six months of 2023, thanks to both improving foreign and domestic demand.
“The external sector improved robustly; tourist arrivals rose over 50 percent year on year in May as the travel industry continued to recover,” it says.
Moreover, goods exports growth accelerated to nearly 10 percent annually in January– May from 3.5 percent in H2 2022.
The report noted that personal credit growth expanded over 22 percent year on year in the same five months—thanks to a relatively accommodative monetary policy stance.
“This, coupled with softer price pressures through June, will have supported household budgets, boding well for private consumption,” says Marta Casanovas, the economist at FocusEconomics.
“This year, economic growth will accelerate from 2022 to one of the strongest in the region, propelled by large infrastructure projects.”
Moreover, the IMF’s US$1.05 billion loan and the government’s continued efforts to implement reforms will shore up investor sentiment, foster stability and attract more funds.
However, the report says the evolution of public debt is a factor to monitor.
FocusEconomics panelists see GDP expanding 5.5 percent in 2023, which is unchanged from one month ago, and expanding 5.6 percent in 2024.
Softer price increases for food and falling prices for transport pushed inflation down to a 15-month low of 3.6 percent in June (May: 4.0 percent), further below the Bank of Tanzania’s 5.0 percent target.
The report says, in 2023, inflation should pick up from current levels and average higher than in 2022—but remain below target—amid stronger activity. A weaker shilling is an upside risk.
“FocusEconomics panelists see consumer prices rising 4.7 percent on average in 2023, which is up by 0.1 percentage points from one month ago, and rising 4.6 percent on average in 2024,” it says.
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