IMF approval for Tanzania’s macroeconomic performance

12 Feb 18

Tanzania’s macroeconomic performance has been satisfactory with most quantitative targets met, though implementation of structural measures has lagged, an International Monetary Fund review of the country has found.

It said Tanzania should step up budget implementation, particularly in development spending, and macroeconomic policies would need to be closely coordinated.

The IMF board has completed its seventh and last review of Tanzania’s economic performance under the Policy Support Instrument. This is designed for countries that do not need balance of payments financial support and signals to donors, multilateral development banks and markets the fund’s endorsement of the policies of the country concerned.

Tanzania’s PSI programme was aimed at maintaining macroeconomic stability and promoting more inclusive growth. It supports reforms to strengthen public finance management, improve the efficiency and transparency of public spending, and move to an interest rate-based monetary policy framework.

The IMF said that, while Tanzania’s GDP data pointed to continued strong growth, other data suggested a weakening of economic activity, with tax revenue collections lower than expected and stagnant credit growth.

Inflation remained moderate, and international reserves have increased substantially, it said. The IMF noted that, after recording a small fiscal surplus in July-September against a programmed deficit, the Tanzanian government planned to step up budget implementation, particularly in development spending.

It said strong growth and job creation were needed to address high poverty and a large number of underemployed young people.

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