The Bank of Tanzania (BOT) released its Monthly Economic Review for June 2026, covering the year ending May 2026, and the data points to an economy expanding on strong exports and private sector credit while absorbing imported fuel-price pressure.
Exports of goods and services grew 17.8% to USD 19,679.4 million, led by gold, travel receipts, and manufactured goods.
Headline inflation edged up to 4.2% in May 2026, from 4.0% the previous month, on the pass-through of elevated global fuel prices to transport costs.
Credit to the private sector expanded 23.2%, with transport and communication lending up 44.6%, while foreign exchange reserves reached USD 5,538.8 million, covering 4.3 months of imports.
The Central Bank Rate (CBR) was held at 5.75%, and the Tanzanian Shilling appreciated 3.02% year-on-year.
Table of Contents
Inflation
Headline annual inflation increased to 4.2% in May 2026, from 4.0% in April 2026 and 3.2% in May 2025.
The rise reflected the pass-through of elevated global fuel prices to transport costs, while remaining within the national target and the East African Community (EAC) and Southern African Development Community (SADC) convergence benchmarks.
Core inflation, which excludes unprocessed food and energy, rose to 3.4% from 3.1% the previous month and 2.1% a year earlier, driven by prices of cement, transport, and household equipment.
Core inflation remained the largest contributor to headline inflation, accounting for 2.6 percentage points.
Food inflation eased to 5.6% from 5.7% in April 2026, as prices of sorghum, wheat, finger millet, beans, and maize stabilised.
Food inflation is expected to moderate further with the onset of the May and June 2026 harvest across most of the country.
National Food Reserve Agency (NFRA) stocks stood at 500,692 tonnes in May 2026, after the release of 10,234.5 tonnes of maize and paddy to traders during the month.
Energy, fuel, and utilities inflation moderated to 5.0% from 5.3% in April 2026 and 6.1% a year earlier, though retail fuel prices remained elevated.
Monetary Policy
At its April 2026 meeting, the Monetary Policy Committee (MPC) maintained the Central Bank Rate (CBR) at 5.75% for the quarter ending June 2026, with the corridor narrowed to plus or minus 150 basis points from plus or minus 200 basis points to sharpen policy transmission.
The 7-day interbank cash market (IBCM) rate averaged 5.92% in May 2026, comfortably within the corridor.
Reverse repo sales rose to TZS 399.5 billion (approximately USD 152.7 million) from TZS 379.7 billion, underscoring the Bank’s accommodative stance.
Extended broad money supply (M3) expanded by 25.2%, from 22% the previous month, driven by private sector credit.
Private sector credit grew 23.2% in the year to May 2026, broadly in line with the 23.6% recorded in the preceding month.
Transport and communication recorded the highest sectoral credit growth at 44.6%, followed by trade at 35% and agriculture at 30.9%.
Personal loans, largely financing micro, small, and medium-sized enterprises (MSMEs), accounted for the largest share of outstanding credit at 34.7%.
Interest Rates
The overall lending rate was little changed at 15.32% in May 2026, from 15.33% in April 2026.
Negotiated lending rates for prime customers eased to 11.9% from 12.56%.
The overall deposit rate decreased to 8.43% from 8.54%, while the negotiated deposit rate moderated to 11.25% from 11.37%.
The spread between the one-year lending rate and the overall deposit rate narrowed to 5.22 percentage points, from 5.50 percentage points.
Financial Markets
Government Securities
The Bank conducted two Treasury bill auctions with a combined tender of TZS 498.1 billion (approximately USD 190.3 million).
Both were oversubscribed, attracting bids of TZS 1,330.3 billion (approximately USD 508.4 million), of which TZS 499.8 billion (approximately USD 191.0 million) was successful.
The weighted average yield on Treasury bills eased to 4.74% from 5.06% in the preceding month.
The 15-year and 20-year Treasury bond auctions carried tender sizes of TZS 165.5 billion and TZS 236.3 billion respectively.
They attracted bids of TZS 324.9 billion (approximately USD 124.2 million), of which TZS 235.1 billion (approximately USD 89.8 million) was successful.
Yields eased to 10.39% on the 15-year bond and 10.43% on the 20-year bond.
Interbank Cash Market
Interbank cash market turnover totalled TZS 1,732.7 billion (approximately USD 662.1 million), compared with TZS 2,567.8 billion the previous month.
The 7-day tenor dominated activity at 63.8%.
The overall IBCM rate eased to 6.14% from 6.26% in April 2026.
Interbank Foreign Exchange Market
Total transactions in the Interbank Foreign Exchange Market (IFEM) increased to USD 119.3 million, from USD 64.6 million in April 2026, supported by seasonal inflows from gold exports.
The Bank auctioned USD 44 million to maintain orderly market conditions, compared with USD 15.3 million the previous month.
The Shilling traded at an average of TZS 2,616.88 per USD in May 2026, from TZS 2,612.46 in April 2026, and on an annual basis strengthened 3.02%, reversing a 3.82% depreciation in the year-earlier period.
Government Budgetary Operations
The Government collected total revenue of TZS 3,242.3 billion (approximately USD 1.24 billion) in April 2026, exceeding the monthly target by 7.1%.
Central government revenue reached TZS 3,111.9 billion (approximately USD 1.19 billion), 7.2% above target and 96.0% of the total.
Tax revenue rose to TZS 2,690.6 billion (approximately USD 1.03 billion), 10.2% above target, driven by taxes on imports and income tax.
Non-tax revenue was TZS 421.3 billion (approximately USD 161.0 million), 8.7% below its target of TZS 461.4 billion.
Total expenditure stood at TZS 3,457.2 billion (approximately USD 1.32 billion), comprising TZS 2,696.6 billion (approximately USD 1.03 billion) in recurrent spending and TZS 760.6 billion (approximately USD 290.6 million) in development spending.
Debt Developments
The national debt stock stood at USD 51,492.5 million at end-May 2026, a marginal decline on the previous month, with external debt accounting for 70.8%.
External Debt
External debt stock (public and private) eased to USD 36,446.8 million, of which 81.1% was public.
External loan disbursements during the month totalled USD 125.9 million, mainly to the central government.
External debt service payments were USD 189.4 million, including USD 140 million in principal repayments.
Multilateral institutions remained the largest creditor category at 57.5%, followed by commercial lenders.
The US Dollar dominated the currency composition at 62.9%, followed by the Euro at 15.6%.
Domestic Debt
Domestic debt eased to TZS 39,257.3 billion (approximately USD 15.00 billion), mainly on lower use of the overdraft facility.
The Government raised TZS 278.8 billion (approximately USD 106.5 million) through securities, comprising TZS 128.6 billion in Treasury bonds and TZS 150.2 billion in Treasury bills.
Domestic debt servicing totalled TZS 367.7 billion (approximately USD 140.5 million), including TZS 106.1 billion in principal and TZS 261.6 billion in interest.
External Sector Performance
Current Account
The current account deficit widened to USD 2,209.5 million in the year ending May 2026, from USD 2,090.9 million a year earlier, as imports rose faster than exports.
Exports
Total exports of goods and services grew 17.8% to USD 19,679.4 million in the year ending May 2026, from USD 16,706.2 million a year earlier, with gold, travel, and manufactured goods together making up 60.8% of the total.
Goods exports rose 20.4% to USD 11,627.9 million, from USD 9,654.7 million.
Gold exports increased 46.7% to USD 5,532.3 million, from USD 3,771.5 million, on favourable global prices and higher domestic production.
Manufactured goods exports grew 38.3% to USD 2,009.3 million, from USD 1,452.6 million, on demand from neighbouring countries for iron and steel and glassware.
Traditional exports rose 12.8% to USD 1,639.7 million, from USD 1,453.8 million, led by tobacco, coffee, and cotton.
On a monthly basis, goods exports increased 75.0% to USD 963.3 million in May 2026, from USD 550.4 million in May 2025.
Service receipts grew 14.2% to USD 8,051.5 million, from USD 7,051.5 million, driven by travel and transport.
Travel receipts rose 9.5% to USD 4,419.1 million, consistent with a 5.9% increase in international arrivals to 2,298,900.
Transport receipts increased 16.0% to USD 3,146.3 million, on higher freight earnings from transit goods.
Imports
Imports of goods and services increased 17.8% to USD 20,408.6 million, from USD 17,322.1 million.
Growth was led by industrial supplies, refined petroleum products, freight services, and machinery.
Imports of refined white petroleum products, about 13.0% of the total goods import bill, rose 9.9% to USD 2,657.8 million, from USD 2,417.4 million, on higher global oil prices.
Service payments increased 8.3% to USD 3,370.1 million, from USD 3,111.9 million, on higher freight payments.
The primary income account deficit narrowed to USD 1,830.7 million, from USD 2,001.4 million, on lower interest payments to non-residents.
The secondary income surplus fell to USD 350.4 million, from USD 526.5 million, on lower personal transfers.
Foreign Exchange Reserves
Foreign exchange reserves stood at USD 5,538.8 million at end-May 2026, up from USD 5,136.7 million a year earlier.
This covered 4.3 months of projected imports, above the national adequacy threshold, underpinned by strong gold export receipts and the continued gold purchase programme.
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