Tanzania upbeat on global growth

Tanzania’s growth is predicted to rise 6.8 per cent this year after 6.6 in 2016 making it the fastest growing economy in the East African Community (EAC) bloc and third in the sub- Saharan Africa (SSA) region.

The other EAC members will grow as follows: Rwanda 6.1 per cent, Kenya 5.3 per cent and Uganda 5.0 per cent while Burundi will stagnate and South Sudan decelerate by 3.5 per cent. The other top performers in SSA will be Ethiopia (7.5 per cent), Ivory Coast (6.9 per cent) and Senegal (6.8 per cent).

The global economy is gaining momentum which the International Monetary Fund (IMF) says is a bonus for mostly commodity exporting countries.

However, the global financial prefect has again raised concerns about a growing shift towards trade protectionism and a breakdown of international economic collaboration which took root after World War II and has grown since.

In its latest World Economic Outlook released in Washington recently, the IMF has raised its global growth forecast for 2017 to 3.5 per cent after expanding by 3.1 per cent last year. Output in sub-Saharan Africa is projected to increase by 2.6 per cent compared to the 1.4 per cent rate recorded in 2016.

The IMF says commodity-exporting economies such as Australia are set to recover, especially given the average 20 per cent increase in coal prices.

"The acceleration in activity will be supported by accommodative monetary policies, supportive fiscal policies or infrastructure investment, improving sentiment following the upturn in commodity prices, and less drag from declining investment in the commodity sector," it says in the report.

But IMF economic researcher says while there is a chance economic growth will exceed expectations, significant downside risks continue to cloud the medium-term outlook.

The IMF upgraded its forecast for the global economic growth by 0.1 percentage points but it said that "inward-looking policies" could derail economic improvements.

Last week, the World Trade Organisation (WTO) said that it expects the value of goods shipped around the globe to grow by around 2.4 per cent in 2017, up from just 1.3 per cent in 2016. The forecast takes into account inflation and currency movements.

In March, the G20 group of the world's biggest economies dropped a long-standing endorsement of free trade.

The head of International Monetary Fund, Christine Lagarde, said last week that one of the biggest risks facing the global economy is "the sword of protectionism hanging over global trade." The WTO said there were two reasons for the unusually weak trade growth last year. It said that investment spending slumped in the US.

Meanwhile, China continued to shift its economy away from relying on exports to a new model based on consumer spending. And the demand for imports in China has declined, as the country sources more goods domestically.