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Tanzania Country Risk Report Q3 2018

Tanzania Country Risk Report Q3 2018

Growth in Tanzania is likely to decelerate in the coming quarters, due to a slowdown in lending and gold exports. That said, the level of headline growth will remain relatively robust given large infrastructure projects boosting fixed investment.

Slow credit growth in recent quarters will likely lead to the Bank of Tanzania undertaking monetary loosening after implementing a new monetary policy framework. This is despite moderately higher inflationary pressures in H218.

After range-trading in the short term, the Tanzanian shilling is set to weaken over the coming quarters. A pullback in investor confidence brought on by a more hostile investment environment and weakening exports will drive downward pressure.

Declining freedom of the press and civil society organisations in Tan-zania over recent quarters reflects government efforts to consolidate power. While some backlash from Western media and domestic civil society organisations is likely, President John Magufuli's govern-ment's mandate will remain robust.

Tanzania's current account deficit will widen in the coming quarters owing to weaker export growth and a higher import bill. A deteriorating regulatory environment is likely to see foreign direct investment slow.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Weak Lending And Gold Export Ban Will See Growth Slow
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Deficit Will Widen As Trade Balance Weakens
Outlook On External Position
Foreign Financing Will Support External Position
Monetary Policy
Monetary Loosening Likely Despite Higher Inflationary Pressures
Monetary Policy Framework
Structural Fiscal Position
Broader Revenues Will Boost Budget In The Long Term
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
TZS: Waning Confidence And Competitiveness Will Offer Headwinds
TABLE: BMI CURRENCY FORECAST
Chapter 2: 10-Year Forecast
The Tanzanian Economy To 2027
Regulatory Challenges Pose Risk To Otherwise Bright Growth Story
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Weakening Press Freedom Highlights Magufuli's Consolidation Of Power
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Continuing CCM Rule Will Sustain Stability
Chapter 4: Operational Risk
Operational Risk
TABLE: OPERATIONAL RISK
Business Crime
TABLE: BUSINESS RESPONSE TO WHITE COLLAR CRIME AND ORGANISED CRIME RISKS
Education
Chapter 5: BMI Global Macro Outlook
Key Divergences Emerging In World Economy
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: TANZANIA – MACROECONOMIC DATA AND FORECASTS

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