Dar es Salaam. Tanzania’s economy is expected to grow at a rate of 5.5 percent in 2020 compared to earlier estimates of 6.9 per cent.
Finance and Planning minister Philip Mpango attributed the slowed growth to the outbreak of Covid-19 pandemic which has affected most of the Tanzania’s trading partners and sectors.
This was said by Dr Mpango on Thursday, June 11 when presenting to Parliament the national state of the economy report for 2019 and the development plan for 2020/21 financial year in Dodoma.
This year’s economic growth projection is not only below the previous estimates, but also below the 7 per cent growth recorded in 2019.
The government’s economic growth forecast of 5.5 percent for this year, contradicts with 2.5 per cent World Bank (WB) staff estimates which was announced early this week.
The WB’s estimates are based on assumptions of strengthened government action on containing the pandemic and mitigating the economic impact, as well as improving external conditions.
Even with additional policy actions to strengthen the health response and mitigate the economic effects, the WB says 2020 Gross Domestic Product (GDP) growth will likely slow sharply.
“Tourism has halted, and exports of manufacturing and agricultural goods have slumped,” the WB report reads in part.
In combination with direct labor market disruptions from the pandemic, this has caused a severe dampening of private domestic demand and deterioration of domestic business conditions.
Due to the Covid-19, estimates for 2020 growth are highly uncertain and external demand and domestic business conditions over the coming months are very unclear, according to the report.
According to the International Monetary Fund (IMF), economic growth in Sub-Saharan Africa decreased to 3.1 percent last year compared to 3.3 percent recorded in 2018.
Further, due to Covid-19, the economy is projected to contract by -1.6 percent in 2020.
However, according to the report, next year Sub-Saharan Africa economies are expected to recover to a growth of 4.1 percent.
The IMF banks its hopes on ongoing initiatives on combating Covid-19, expectations of increasing grants for fighting the pandemic and stability in global oil price.
As the pandemic ravages businesses, the global economy is also projected to contract by -3 per cent due to the effects of Covid-19 and recovers to a growth of 5.8 percent next year.
The world economy grew at an average rate of 2.9 percent in 2019 compared to 3.6 percent in 2018.