Outlook for 2011-12

• The president, Jakaya Kikwete, and his party, Chama Cha Mapinduzi (CCM), will continue to dominate the political scene. However, the party is far from united and divisions are likely to grow in the forecast period.
• Having been liberated from the constraints of pleasing different factions in order to maintain support, Mr Kikwete is expected to pursue reform more vigorously in his final term in office.
• Revenue growth will be stronger in 2010/11, but the government will maintain its expansive expenditure programme, with the fiscal deficit peaking at 6.6% of GDP. A slight slowdown in spending should allow it to fall to 6% in 2011/12.
• Real GDP growth is expected to increase to 7.1% in 2011 and 7.5% in 2012 as investment, trade and tourism pick up. Agriculture should also perform well (weather permitting), helped by government subsidies.
• Inflation is forecast at 7.7% in 2011 and 6.5% in 2012. Rising international commodity prices, oil especially, will have a negative effect on the local economy during 2011, but should moderate in 2012.
• The current-account deficit is forecast to fall to 8.3% in 2011, before increasing to 8.9% of GDP in 2012. This is mainly due to trends in the trade account.

Monthly review

• The CCM has announced major changes in the composition of its governing National Executive Committee (NEC) as the party leadership accepted that reform is needed to improve performance.
• The new NEC has begun its tenure by talking tough, including a commitment to reinvigorating the party by tackling the problem of underperforming leaders at both the district and regional levels.
• The government has deferred debate on its proposed Constitutional Review Bill, mainly owing to the need to extend the period for public debate on the bill.
• The government is increasing its military and naval commitment to the country's offshore maritime zone in order to prevent attacks by Somali pirates.
• The Tanzanian Petroleum Development Corporation (TPDC) has postponed its planned fourth licensing round from April until 2012. A major find between now and then will increase the value of the bids on the new blocks.
• The Bank of Tanzania has distanced itself from claims that it is looking into the idea of being able to draw on funds held in offshore accounts by mining companies if necessary at times of crisis.