Tanzania's economy is projected to expand by approximately 6% in 2025, an increase from the estimated 5.4% growth in 2024, according to a letter by the finance minister and central bank governor to the International Monetary Fund.
However, they noted that the economy might face challenges such as intensifying regional conflicts, fluctuating commodity prices, a global economic slowdown, and climate change-induced natural disasters.
At the same time, inflation is staying within the central bank's 5% target desired range, and there is a fiscal consolidation in progress that supports growth.
During the fiscal year 2023/24, the current account deficit decreased, primarily due to robust service exports and a reduction in imports. The foreign exchange market pressures have lessened, influenced by seasonal current account movements, a firm monetary policy, and flexible exchange rates.