IMF puts Tanzania’s economic growth above 7 pct in 2014

DAR ES SALAAM (Reuters) – Tanzania’s gross domestic product expanded by more than 7 percent in 2014, with falling oil prices expected to further buoy the economy this year, the International Monetary Fund said on Thursday.

The IMF despite a strong growth outlook for 2015, the east African nation must keep a tight rein on public spending due to revenue collection shortfalls and a reduction in financial aid.

Donors have withheld more than three-quarters of $558 million of promised budget support to one of Africa’s biggest per capita aid recipients in the current fiscal year that runs from July last year to June, following allegations of high-level graft in the country’s energy sector.

“Growth is estimated to have been slightly over 7 percent in 2014, while inflation has dropped below the authorities’ target of 5 percent,” the IMF said in a statement.

“The recent international oil price decline will provide a boost to the economy in 2015 and help contain inflation.”

Tanzania’s year-on-year inflation edged up for the first time in five months to 4.2 percent in February up from 4.0 percent in January.

The IMF said however the budget implementation for this fiscal year would be challenging, due to missed revenue targets and some delays in budget financing from donors.

Tanzania’s government estimates its economy will grow by 7.4 percent this year from an estimated 7.2 percent in 2014, due to expected strong performance of agriculture, construction and manufacturing sectors.

Tanzania’s GDP expanded by 32 percent in 2013 to 69.8 trillion shillings ($38 billion) after the state rebased its calculation to incorporate new sectors in the economy, including big discoveries of natural gas.

($1 = 1,850.0000 Tanzanian shillings)

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