Tanzania's structural trade imbalance will keep the overall current account firmly in deficit during 2011-12. The value of gold exports-which account for more than one-third of total exports-will be boosted by steady increases in production and high prices. However, although still high, the price in 2012 is expected to be below earlier peaks and will therefore act as a brake on export value growth. The import bill will remain significant, especially as capital import growth for infrastructure is scaled up. In addition, average oil prices will remain high.

The surplus on the services account will widen as tourism growth picks up on the back of the global economic recovery, although this recovery will be only gradual, as Western markets remain depressed. The deficit on the income account is expected to widen as gold companies repatriate higher profits. The surplus on the current transfers account will remain large, as Tanzania continues to benefit from donor support. However, the pace of increase in this surplus will be slower than in previous years as some bilateral donors reassess their priorities in the wake of recession. The overall current-account deficit is forecast to fall to 8.3% of GDP in 2011, before the deterioration of the trade balance sees it increase to 8.9% of GDP in 2012.