In Summary

According to the latest World Bank analysis of Global Economic Prospects (GEP), Tanzania economy is expected to grow by 6.8 percent in 2018 with Kenya growth put at 5.5 percent as inflation eases.

Dar es Salaam. Tanzania is among non-resource intensive countries that are expected to expand its economy at a solid pace, helped by robust investment growth.

According to the latest World Bank analysis of Global Economic Prospects (GEP), Tanzania economy is expected to grow by 6.8 percent in 2018 with Kenya growth put at 5.5 percent as inflation eases.

Other economies, which are expected to expand include that of Côte d’Ivoire (7.2 per cent), Senegal by 6.9 percent and Ethiopia by 8.2 percent.

However, the growth rate put by World Bank differs with government projects in which the announced recently with Finance Minister, Dr Phillip Mpango insisting the government target of achieving 7 percent economic growth.

World Bank also says in the report that given demographic and investment trends across the region over the longer term, structural reforms would be needed to boost potential growth over the next decade.

“The regional outlook is subject to external and domestic risks and is tilted to the downside,” read part of the statement.

 

 

On global overview, the report indicates that although stronger-than-expected activity in the United States and Euro Area could push regional growth up due to greater exports and increased mining and infrastructure investment, an abrupt slowdown in China could generate adverse spillovers to the region through lower-than-expected commodity prices.

On the domestic front, excessive external borrowing without forward-looking budget management could worsen debt dynamics and hurt growth in many countries.

A steeper-than-anticipated tightening of global financing conditions could also lead to a reversal in capital flows to the region.

“Protracted political and policy uncertainty could further hurt confidence and deter investment in some countries” read the statement.

It further read that rising government debt levels highlight the importance of fiscal adjustment to contain fiscal deficits and maintain financial stability.

Structural policies including education, health, labor market, governance, and business climate reforms could help bolster potential growth.