- Economic activity remains robust, driven by strong mining sector growth, and healthy activity in agriculture, manufacturing and construction, while inflation has remained low.
- Structural reforms are moving forward and should accelerate to help Tanzania navigate a challenging external environment, build resilience to climate change, and raise its long-term economic growth potential.
Washington, DC: A staff team from the International Monetary Fund (IMF), led by Mr. Nicolas Blancher, visited Tanzania during September 17-24, 2025, to discuss economic and financial developments, the economic outlook, and program performance. At the conclusion of the mission, Mr. Blancher issued the following statement:
"Tanzania's economic activity has been robust, with the economy growing at 5.4 percent in the first quarter of 2025, while inflation remained low at 3.4 percent (yoy in August). Strong mining activity, healthy growth in agriculture, and manufacturing are driving the expansion. Despite a positive outlook, risks are tilted to the downside, and include a global economy and trade slowdown, geoeconomic fragmentation, and reduced foreign development assistance. On the domestic front, the upcoming national elections may increase risks of fiscal pressures and reform slowdown, while insufficient and erratic rainfalls could affect growth and inflation."
"Fiscal consolidation was paused in FY24/25 to accommodate higher spending on education and health, clear domestic arrears, and cushion the health impact of reduced foreign aid. In FY25/26, steadfast implementation of the approved budget will be essential to build fiscal space to address pressing social spending needs, while preserving debt sustainability. To this effect, the recent launch of the Medium-Term Revenue Strategy will help enhance revenue mobilization and create fiscal space for highly needed investment in human capital."
"Inflation has remained well within the Bank of Tanzania's (BoT) 3-5 percent target range, allowing the BoT to reduce the central bank rate to 5.75 percent (from 6 percent) and support economic activity while preserving price stability. Higher tolerance for exchange rate flexibility and the improved functioning of the foreign exchange market have helped bring back foreign exchange transactions into the formal market, increasing its liquidity and reducing the parallel market premium. Continuing to enhance exchange rate flexibility will be critical to the further development of the interbank FX market."
"The current account deficit narrowed to 2.5 percent of GDP in FY24/25 driven by strong exports of minerals, agricultural products, and tourism services, against declining oil imports. In 2025, high gold prices and strong tourist arrivals are expected to support the export momentum and help maintain a moderate current account deficit. Gross international reserves stood at an adequate level of US$6.2 billion (about 4 months of prospective imports) in July 2025."
"Discussions also covered ongoing reforms, and the importance of accelerating the pace of reforms to meet the ambitious goals laid out in Tanzania's Vision 2050. The mission reiterated the criticality of ensuring sufficient resources are dedicated to the education and health of a young and rapidly growing population, and of enabling private sector-led growth and job creation. Continuing the implementation of climate reforms, supported by the Resilience and Sustainability Facility and other development partners, will help build climate resilience and sustainability, and safeguard Tanzania's economic gains."
"The mission met with senior government officials, development partners, private sector representatives, and civil society organizations. The IMF team would like to thank the Tanzanian authorities and other counterparts for their hospitality, and the productive discussions."
