Business
Tanzania expects to see a growth and a drop in inflation in 2012
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 statistics office is on Monday expected to release figures for the year-on-year inflation rate for December, with analysts expecting it to reach 20 percent on rising food and fuel prices.
Kikwete said Tanzania would improve the business climate in 2012 to boost investments and continue to implement reforms aimed at developing the country to a middle-income nation by 2025.
One analyst said it was impossible for the government to bring down the inflation rate to single figures by the end of the first half of this year due to rising consumer prices.
“A single digit inflation rate by June is completely unachievable. The inflation rate will continue to accelerate in the coming months because of rising food and oil prices,” said Humphrey Moshi, professor of economics at the University of Dar es Salaam.
“Government figures show that the annual inflation rate is approaching 20 percent, but when you look at the actual increase in the prices of consumer goods out there, the real inflation rate should be in the region of 25 to 30 percent.”
Traders in the foreign exchange market said the statement had no impact on the shilling and little was expected in coming days.
