Tanzania Economic Update - Harnessing the Opportunity for a Climate Smart and Competitiveness Livestock Sector in Tanzania

Abstract

Tanzania has managed a steadily robust growth path amid multiple external shocks, with low and stable inflation by regional standards. While poverty reduction has progressed slowly, the government increased public spending on goods, services, and transfers during the first eight months (8M) of FY2023/24 to enhance the provision of priority social services. Domestic revenue observed double-digit growth, indicating the government’s commitment to revenue mobilization and fiscal consolidation. The current-account deficit narrowed, driven by increased imports and a surge in foreign exchange earnings from the tourism sector. However, foreign exchange challenges persist, which has motivated the Bank of Tanzania (BoT) to raise the policy rate and implement other prudent monetary policies. Over the medium term, the economy is set to grow at around 6 percent, supported by escalated private investments resulting from a strengthened business environment. A positive macroeconomic outlook and an enhanced agricultural productivity have contributed to the estimated decline in poverty. Major risks to the outlook include incomplete implementation of reforms, climate change, and a deterioration of the global economy.