Tanzania’s economy is projected to remain stable over the next 2 years, according to the World Bank’s (WB) 8th Tanzania Economic Update (TEU) published on 19th May 2016.
The Tanzanian economy is forecasted to expand at an annual rate of around 7% in 2017–2018, while the annual rate of inflation is projected to decline to approximately 5%.
Tanzania’s economic growth will be driven by hospitality, construction, finance, and trade, the report indicates.
Strong growth in these sectors will be supported by the demand side by a continued growth in private consumption and private investment.
These projections are based on the assumption that world commodity prices will remain at roughly their current levels and that the Chinese economy will not experience major additional slowdowns.
China is one of Tanzania’s biggest trading partners and among the top 5 providers of Foreign Direct Investments (FDI) in the country.
In 2014, China contributed to more than 10% of Tanzania’s total exports value and was the 3rd major export destination after India and South Africa.
According to a recent announcement by the Chinese Ambassador to Tanzania, Lu Youqing, Chinese investors intend to invest USD5b in the Dar es Salaam region over the next 5 years.
Tanzania’s annual GDP growth rate averaged 7% over the past 5 years, making it one of the 20 fastest growing economies in the world. Over the same period Tanzania’s headline inflation has been brought down to a single digit of 5.4% in March 2016 from an average of 12.6% during 2011.