The Monetary Policy Committee (MPC) of the Bank of Tanzania (BoT) observed in its latest statement that despite the impact of COVID19 on a few sectors like tourism and entertainment, the economy performed satisfactorily.
During the first quarter of 2020, output grew by 5.7%, mainly driven by construction, agriculture, transport and mining.
The MPC noted that the global economy is projected to be weak in 2020, growing by -4.9%, attributable to adverse impact of COVID-19 pandemic on economies.
All economic blocs are projected to experience negative growth of varying degrees, and economic recovery is projected to be more gradual than anticipated in 2021.
However, on the basis of the domestic and external economic environment, the Tanzanian economy is projected to grow by 5.5% in 2020.
This will be supported by growth in agriculture, investment in infrastructure and faster than expected re-opening of economies of our main trading partners.
During Q1 2020, inflation remained low, below the target of 5% in the first half of 2020 and is projected to remain low, between 3 and 5% in 2020, driven by adequate food supply, moderate oil prices and stability of the exchange rate
In its closing comments in the statement, the MPC exhorts the BoT to continue with accommodative monetary policy in order to support the growth of economic activities and safeguard the stability of the financial sector and calls upon the Bank to devise ways of protecting consumers of financial services against the high interest rates charged by banks and financial institutions, as they have a negative impact on growth, particularly of the private sector