Tanzania economy up 7.5 pct last year - BoT

Tanzania`s economy probably grew by some 7.5 per cent last year, below a previous forecast of 7.7 per cent, the central bank said on Monday. ``Real economic growth of 7.5 per cent is likely to be achieved in line with a good performance in agriculture, as well as the strong performance ... in manufacturing, construction, and communication,`` the Bank of Tanzania (BoT) said in a Monetary Policy Statement for February.
The economy had earlier been projected to grow by 7.7 per cent in 2008, before the onset of the global credit crunch that forced a downward revision at the end of last year. But the bank said the country had still weathered the financial crisis in the first half of its current (July 2008-June 2009) fiscal year relatively well. ``Despite the turbulent global environment, the Tanzanian economy continued to maintain solid growth during the first half of 2008/09,`` noted the bank.

Tanzania, a nation of an estimated 40 million people that is reputed for its relative stability in a volatile region, saw its economy grow by 7.1 per cent in 2007. A June 2008 projection was that this would accelerate to 9.2 per cent in 2011. Tanzania`s economy depends largely on mining, agriculture and tourists visiting its wildlife parks and beach resorts, which combine to make the country one of the more appealing frontier markets. BoT said its biggest task for the rest of the fiscal year would be controlling any speculation on the fate of the country`s currency due to the prevailing global market turmoil.
The exchange rate of the national currency, the shilling, is market-driven but the central bank says it is ready to intervene to stop speculation. It adds that, so far, no commercial banks in Tanzania had suffered a direct loss due to the global credit crunch. According to BoT, food-driven inflation would pose a problem: Food inflation stood at 18.6 per cent in December compared with 13.6 per cent the previous month.
Food accounts for 55.9 per cent of the basket of goods used to measure annual inflation. Overall inflation stood at 13.5 per cent in December compared with November`s 12.3 per cent, while the government targets inflation of 6.8 per cent by June this year.