held in August with the government, the
central bank, parliamentarians, the private sector and civil society,
and development partners. Mr. Mauro released the following statement at
the end of the mission: “The economy has continued to perform well,
growing by 7 percent in the first half of 2013. The economic outlook is
promising, with growth projected to continue at a similar pace for the
full year.
Overall inflation fell to
6.1 percent in September with core inflation (excluding food and fuel
prices) at 5.8 percent. In light of broadly benign developments in
domestic food prices and with a continued prudent monetary policy
stance, inflation is projected to decline to the authorities’ medium
term target of 5 percent by mid-2014. The current account deficit
declined somewhat, but remained large, at 13½ percent of GDP in July
2012 – June 2013.
“Fiscal pressures
emerged during the last fiscal year (FY 2012/13, July to June). Net
domestic financing of the government was in excess of targets agreed
under the government’s IMF-supported program, by about 1 percent of GDP.
For the current fiscal year (July 2013 – June 2014), tax revenues are
likely to fall short of initial projections. This is likely to require
sizable adjustments to the budget in the upcoming mid-year review to
align expenditure plans with the available resources. The government has
reaffirmed its commitment to the agreed fiscal deficit target of 5
percent of GDP. To sustain economic growth and to stem fiscal pressures
during the current and next fiscal year, priorities include mobilizing
additional revenues by reducing and simplifying tax exemptions and
bringing the power sector to financial sustainability.
“Key
medium-term policy challenges include fostering continued strong growth
through productive infrastructure investment, while preserving priority
social spending, and maintaining debt sustainability; enhancing the
institutional framework to ensure that possible future revenues from
newly discovered natural gas deposits benefit all citizens; and
improving the business climate.
“Discussions
will continue in the coming weeks; the next IMF Executive Board meeting
on Tanzania is tentatively planned in early 2014.
“The
mission wishes to thank the authorities for their warm hospitality and
for the constructive and open dialogue on policy issues.”
