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Tanzania Country Risk Report Q4 2018

Tanzania Country Risk Report Q4 2018

Key View:

Growth in Tanzania will slow moderately in 2018 and 2019 after robust growth in previous years. We forecast real GDP growth of 6.7% and 6.5% in 2018 and 2019 respectively.

We expect no further monetary easing after the Bank of Tanzania cut its discount rate by 200 basis points to 7.00% in August.

We forecast the fiscal deficit to rise to 3.5% of GDP and 3.8%, in fiscal years (FY) 2018/19 and FY2019/20, respectively, from an estimated 2.9% in FY2017/18.

Tensions relating to Tanzania's southern neighbours Malawi and Mozambique have the potential to pose risks to regional stability in the coming years.

The Tanzanian shilling will continue to weaken at a gentle pace in the coming quarters, but remains shielded from a more rapid sell-off. That said, stable mac-roeconomic fundamentals will temper the extent of downward pressure on the currency.

Key Risks

Recent policies to bolster tax revenues by the Tanzanian government through stricter enforcement and rising regulatory uncertainty risk undermining the country's attractiveness as an investment destination. While our core view for the country remains bright, a continued embrace of such policies could threaten long-term growth prospects.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Construction And Agriculture Sectors Will Boost Short-Term Growth
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
Foreign Financing Will Support External Position
Monetary Policy
Tanzanian Policy Pass-Through Will Remain Weak
Monetary Policy Framework
Fiscal Policy And Public Debt Outlook
Higher Public Investment Will See Budget Deficit Increase
Tanzania Country Risk Q4 2018ContentsStructural Fiscal Position
Broader Revenues Will Boost Budget In The Long Term
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
TZS: Relative Stability, But Gradual Weakening
TABLE: FITCH SOLUTIONS CURRENCY FORECAST
10-Year Forecast
The Tanzanian Economy To 2027
Long-Term Outlook Bright, With Regulatory Headwinds
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Security Issues Along Borders Will Pose Risks
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
CCM Rule Will Sustain Stability
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: TANZANIA – MACROECONOMIC DATA & FORECASTS

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