THE World Bank (WB) forecasts the economy to expand by 5.4 per cent this year, suggesting weaker growth than government projections of 7.1 per cent.
The Lead Economist of the World Bank, Tanzania office, Bill Battaile, said in Dar es Salaam yesterday that weaker than expected growth rates were due to a decline in investment, exports and private lending.
“The Tanzania Bureau of Statistics reports that real GDP growth was 7.0 per cent in 2018, slightly higher than 6.8 per cent in 2018.
However official demand side data including data related to consumption, investment and net trade suggest that growth softened in 2018,” he said in a presentation at the launch of 12th Tanzania Economic Update.
He said the 2019 estimates were an improvement from 2018 growth estimates of 5.2 per cent growth rate, the lowest in East African Community (EAC) member states.
The government projects economic growth rates to reach 7.1 per cent this year, up from estimated growth of 7.0 per cent last year due to expansion in the construction sector.
The World Bank official said it is projected that the growth rate would reach 5.7 per cent next year and 6.0 per cent in 2021 and maintain the level for a medium term depending on the pace of implementing reforms.
“Annual real GDP growth is expected to gradually improve to 6 per cent over the next few years, assuming modest but steady improvements in accomplishing reforms.
Faster reform action could raise this outlook,” he said in a presentation at the launch of 12th Tanzania Economic Update. The government projects economic growth rates to reach 7.1 per cent this year up from estimated growth of 7.0 per cent last year to expansion in the construction sector.
The National Bureau of Statistics (NBS) Director General, Dr Albina Chuwa, told the `Daily News’ that the differences between government and World Bank figures on the economy were due to different models of surveys and methodologies used.
She said they would meet with World Bank, Bank of Tanzania and Ministry of Finance and Planning officials next month to compare their methodologies. “The differences are due to different models of methodologies used.
We will sit with them and look at their methodology,” she said. The current account deficit widened to 5.2 per cent of GDP in the year ending January 2019, up from 3.2 per cent a year earlier, the bank said.
The value of exports dropped nearly 4 per cent last year, partly because the government banned cashew exports, a major foreign exchange earner, due to low prices.
On the other hand, the construction of the standard gauge railway and expansion of Dar es Salaam port helped drive up the value of imports by 7.8 per cent, the World Bank said.