DAR ES SALAAM, Sept. 26 (Xinhua) -- A staff team from the International Monetary Fund (IMF) has praised Tanzania's strong economic performance, while urging continued fiscal discipline and reforms to sustain growth momentum.
In a statement issued on Thursday at the end of the mission's visit to Tanzania on Sept. 17-24, team leader Nicolas Blancher said the East African country's economy expanded by 5.4 percent in the first quarter of 2025, supported by robust mining, agricultural, and manufacturing activities.
Inflation remained contained at 3.4 percent in August, within the Bank of Tanzania's target range of 3-5 percent, said the statement.
Blancher noted that fiscal consolidation was paused in the 2024/2025 financial year to allow increased spending on education and health, clearance of domestic arrears, and measures to offset reduced foreign aid.
The steadfast implementation of the 2025/2026 budget will be essential for preserving debt sustainability and creating fiscal space for social investment, he added.
On monetary policy, the IMF welcomed the Bank of Tanzania's decision to lower the central bank rate to 5.75 percent, aiming to support growth, while emphasizing the importance of greater exchange rate flexibility to strengthen the interbank foreign exchange market.
The IMF said Tanzania's current account deficit narrowed to 2.5 percent of its gross domestic product (GDP) in the 2024/2025 financial year, thanks to strong exports of minerals, agricultural products, and tourism, as well as lower oil imports.
Tanzania's foreign reserves stood at 6.2 billion U.S. dollars in July, equivalent to about four months of prospective imports, according to the statement.
The mission highlighted the need to accelerate reforms in line with Tanzania's National Development Vision 2050, focusing on enhancing education and health services for the country's young population, promoting private sector-led growth and job creation, and advancing climate change reforms with support from the Resilience and Sustainability Facility. ■