IMF praises Tanzania’s macro-economic performance

IMF praises Tanzanian economic performance

The International Monetary Fund (IMF) said Tanzania’s macro-economic performance remains robust.

The IMF said in a statement that inflation in the east African nation came down below the authorities’ target of 5 percent and was expected to remain close to the target.

“Economic growth was robust during the first half of 2016 and is projected to remain at about 7 percent this fiscal year,” said the IMF in its fifth review under the policy support instrument for Tanzania.

However, the IMF warned that there were risks that could adversely affect economic growth going forward, arising from the currently tight stance of macro-economic policies, the slow pace of credit growth that may become protracted, slow implementation of public investment, and private sector uncertainty about the government’s new economic strategies.

The statement also stated, while progress in structural reforms identified under the program has been generally slow, the Tanzanian authorities have recently stepped up efforts to advance them.

They include measures taken to strengthen public financial and debt management, modernize the monetary policy framework, and improve monitoring of parastatal enterprises, said the statement adding that the authorities have committed to further reforms in these areas.

“After recording a small fiscal surplus in July-September (2016), the government is committed to stepping up budget implementation, particularly in public investment, including by mobilizing external financing,” said the statement.

It added that monetary policy should be eased to address the tight liquidity situation and support credit to the private sector.

“The Bank of Tanzania’s steps in this regard are appropriate, but will need to be fine-tuned when the planned fiscal spending materializes,” said the statement.

It added the increase in international reserves recorded since the beginning of the fiscal year was a welcome step to gradually rebuild buffers.

 

 

Zainab