The International Monetary Fund (IMF) has released today its WORLD ECONOMIC OUTLOOK Report (WEO) 2021, projecting a Gross Domestic Product (GDP) growth of +4.0% and +5.1% for Tanzania in 2021 and 2022.
Global Economic Growth
Titled “Recovery During a Pandemic: Health Concerns, Supply Disruptions, and Price Pressures” the report stressed that global economic recovery is continuing, even as the pandemic resurges.
The global economy is projected to grow 5.9% in 2021 and 4.9% in 2022, 0.1 percentage point lower for 2021 than in the July forecast.
The downward revision for 2021 reflects a downgrade for advanced economies—in part due to supply disruptions—and for low-income developing countries, largely due to worsening pandemic dynamics, impacted by the highly transmissible Delta variant and large disparities in vaccine access and in policy support.
While almost 60% of the population in advanced economies are fully vaccinated and some are now receiving booster shots, about 96% of the population in low-income countries remain unvaccinated.
Beyond 2022 global growth is projected to moderate to about 3.3% over the medium term. Advanced economy output is forecast to exceed pre-pandemic medium-term projections—largely reflecting sizable anticipated further policy support in the United States that includes measures to increase potential.
By contrast, persistent output losses are anticipated for the emerging markets and developing economies due to slower vaccine rollouts and generally less policy support compared to advanced economies.
Aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed it by 0.9% in 2024.
By contrast, aggregate output for the emerging markets and developing economies (excluding China) is expected to remain 5.5% below the pre-pandemic forecast in 2024, resulting in a larger setback to improvements in their living standards.
According to the IMF, the economy of Tanzania grew by 7.0% in 2019, and by 4.8% in 2020, impacted by the Covid-19 pandemic.
The IMF projects that Tanzania’s real GDP growth will be 4.0% in 2021, 5.1% in 2022, and 6.0% in 2026.
During the same period, the real GDP growth for Sub-Saharan Africa is projected to be 3.7%, 3.8%, and 4.2%.
During the same period, Tanzania’s average annual inflation is projected to increase by 3.2%%, 3.2%, and 3.4%, while the country’s current account balance is projected to be -3.2%, -3.8%, and -2.6% of GDP.