admintelecommunications, construction and financial services sectors, the International Monetary Fund has said.
The IMF cut its 2011 growth forecast for Tanzania to 6 percent from 7,2 percent in March, saying frequent power outages would hurt output while food and fuel prices could push inflation higher.
“Tanzania’s growth for the calendar year 2011 could be a bit more than 6 percent despite recent power shortages, Tanzania’s economy continues to grow strongly, expanding by 6,3 percent in the first half of 2011,” said Peter Allum, division chief at the IMF’s African Department.
Like its East African neighbours, Tanzania has struggled this year with rising inflation driven by higher food and fuel prices, a worsening current account deficit and a slide in its currency to record lows against the US dollar.
“Public spending has risen as a share of gross domestic product in recent years to deliver significant growth in local government health, education and other social programs as well as scaled-up investments in roads and other infrastructure,” he said at a news conference in Dar es Salaam.
The news conference was held at the conclusion of the IMF’s latest Policy Support Instrument review for east Africa’s second largest economy.
Allum said talks with the government focused on ensuring public spending does not exceed the resources available, setting the right policy mix for reducing inflation and the financial implications of the country’s emergency power plan. – Reuters.
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