Country Report Tanzania May 2011

Outlook for 2011-12: Economic growth

Economic growth is expected to be strong during 2011-12, underpinned by the construction, mining and services sectors. Construction growth will be driven by donor-funded infrastructure development-notably in roadbuilding and the power sector-and by commercial and residential development in major cities. Gold exports will rise steadily, bolstered by high global prices and increased production. Growth in services will be driven by telecommunications and transport, and financial services will benefit from the banking sector's relative isolation from global markets.

Economic growth will be aided further by a pick-up in agricultural performance (weather permitting) as the government supports the sector with large subsidies. However, long-standing constraints, such as poor energy and transport infrastructure, as well as excessive bureaucracy, will restrain economic growth. Overall, real GDP growth is expected to reach the government's target of 7.1% in 2011 and 7.5% in 2012; these levels are relatively strong but below potential and will not translate into any major increase in income per head.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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