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Tanzania has enjoyed a strong post-pandemic recovery despite a challenging external environment. The GDP growth rate reached 4.6% in 2022 and is expected to rise to 5.1% in 2023, supported by the implementation of structural reforms to strengthen the competitiveness of the economy, improve the business and investment environment, and reduce the cost of regulatory compliance. Growth is projected to reach the long-run potential of about 6 percent in 2025. Tanzania’s headline inflation was substantially lower than many regional economies and kept declining since the beginning of 2023. The inflation rate fell from 4.4% in June 2022 to 3.3% in July 2023, driven by the easing of global commodity prices, the government subsidies on fuel and fertilizer products, as well as the stability of the Tanzania shilling vis-à-vis the US dollar.

The growth has been largely concentrated in sectors that employ relatively fewer workers from low-income households, which has resulted in a weak impact of economic growth on poverty reduction. While no significant change in the poverty rate is anticipated in 2023, the prospects for poverty reduction in Tanzania are modestly optimistic as economic recovery continues.

Despite broadly stable public revenue collection, an increase in overall expenditures widened the fiscal deficit from 3.6% of GDP in FY2021/22 to 4.4% in FY2022/23. The government has continued to effectively manage its debt levels amid external challenges, such as stricter financing conditions. The latest joint IMF-World Bank Debt Sustainability Analysis, published in April 2023, maintained Tanzania's risk of debt distress at a moderate level, which is consistent with the previous assessment. To safeguard medium-term debt sustainability, it is advisable for the government to maintain access to concessional financing to the extent possible while concurrently enhancing revenue mobilization and strengthening public investment management.

Despite the recent strong growth in exports, largely driven by tourism rebound, the stronger growth of imports pushed up by domestic demand compounded with rising international commodity prices widened the current-account deficit (CAD) to 5.6% of GDP in 2022. The CAD was a largely funded drawdown of official gross reserves, which fell to $5.3 billion (covering 4.8 months of imports) by end-June 2023 from $6.4 billion (6.6 months of imports) at the end of 2021. Although the Tanzanian shilling remained relatively stable against the US dollar in 2022, in 2023, pressure on the shilling has increased.

Last Updated: Sep 14, 2023


Tanzania: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

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Additional Resources

Country Office Contacts

Main Office Contact
50 Mirambo Street
P. O. Box 2054
Dar es Salaam, Tanzania
For general information and inquiries
Loy Nabeta
External Affairs Officer
+255 22 216 3256
For project-related issues and complaints