Tanzania Business Forecast Report Q3 2014

Date: June 24, 2014
Pages: 49
Price:
US$ 1,195.00
Publisher: Business Monitor International
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: TBEE822D70CEN
Leaflet:

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Tanzania Business Forecast Report Q3 2014
Includes 3 FREE quarterly updates

Core Views

We forecast real GDP growth of 6.9% in 2014. This is a slight downwards revision, as goods exports decline and government implementation of development projects falls behind schedule. Growth will nevertheless remain robust from 2015 to 2018 as the consumer base grows and investment flows into the nascent offshore gas sector.

Tanzania’s current account deficit will widen over the coming years, which will make the country increasingly dependent on financial and capital inflows to maintain its positive balance of payments. As a result, the government must be careful not to alienate potential investors through increasingly overt resource nationalism regarding its nascent offshore gas sector.

Although we forecast that Tanzania’s budget deficit will decline to 3.8% of GDP this fiscal year, from 5.0% last year, we caution that this obscures a number of risks. The country is heavily reliant on grants to meet its obligations, falling gold prices are constraining tax revenues, and interest costs on debt are rising.

Major Forecast Changes

Real GDP growth in 2014 has been revised down from 7.1% to 6.9%.
CHAPTER 1: POLITICAL OUTLOOK

SWOT Analysis
BMI Political Risk Ratings
Domestic Politics
Corruption To Be Key Election Issue
Corruption will be a key issue during the campaign for the 2015 election. Although the deep-rooted nature of the practice means that
meaningful progress in addressing it is unlikely in the near future, we do not expect the ruling CCM party to cede power over the issue.
  Table: POLITICAL OVERVIEW
Long-Term Political Outlook
Corruption And Reliance On Foreign Money High On The Agenda
Tanzania will continue to enjoy broad political stability over the coming decade, with little to suggest that the ruling Chama Cha
Mapinduzi party's authority will be threatened. That is not to say the 2013-2022 period will be without challenges. Chief among these will
be dealing with high levels of corruption and addressing the country's dependence on foreign aid.

CHAPTER 2: ECONOMIC OUTLOOK

SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Gas Investment And Consumers To Power Growth
We forecast real GDP growth of 6.9% in 2014. This is a slight downwards revision, as goods exports decline and government
implementation of development projects falls behind schedule. Growth will nevertheless remain robust from 2015 to 2018 as the
consumer base grows and investment flows into the nascent offshore gas sector.
  Table: Ec onomic Acti vit y
Fiscal Policy
Small Fiscal Deficit Belies Risks
Although we forecast that Tanzania's budget deficit will decline to 3.8% of GDP this fiscal year, from 5.0% last year, we caution that
this obscures a number of risks. The country is heavily reliant on grants to meet its obligations, falling gold prices are constraining tax
revenues, and interest costs on debt are rising.
  Table: Fiscal Policy
Monetary Policy
Inflationary Pressures To Moderate
We have revised down our end-2014 inflation forecast for Tanzania on the back of a moderating outlook for food price growth through
the remainder of the year. Nevertheless, we expect that the central bank will pursue a relatively tight monetary policy, as inflation
remains above its target.
  Table: Moneta ry Polic y
Balance Of Payments
Declining Gold Prices To Widen C/A Deficit
Tanzania's current account deficit will widen over the coming years, which will make the country increasingly dependent on financial and
capital inflows to maintain a positive balance of payments position. As a result, the government must be careful not to alienate potential
investors through increasingly overt resource nationalism regarding its nascent offshore gas sector.
  Table: Current Account

CHAPTER 3: 10-YEAR FORECAST

The Tanzanian Economy To 2023
Robust Growth Forecast On Gas Investment
We are forecasting a period of robust growth in the Tanzanian economy in the years ahead, as the country looks set to benefit from
its nascent offshore gas sector, and the investment being pumped in to the country to develop this. Increasing regional integration and
significant investment in infrastructure projects will also boost growth. The county remains beholden to the weather, however, through
the importance of its agricultural sector and dependence on hydroelectricity, and this presents the greatest risk to our forecasts.
  Table: Long-Term Mac roeconomic Forecasts

CHAPTER 4: BUSINESS ENVIRONMENT

SWOT Analysis
BMI Business Environment Risk Ratings
Business Environment Outlook
Institutions
  Table: BMI BUSINE SS AND OPER ATION RISK RATINGS
  Table: BMI LE GAL FRAMEWOR K RATING
  Table: LABOUR FORCE QUALITY
Infrastructure
Market Orientation
  Table: ANNUAL FDI INFLOWS
  Table: TRADE AND INVE STMEN T RATINGS
  Table: TOP EXPORT DESTINATIONS, 2004-2011
Operational Risk

CHAPTER 5: KEY SECTORS

Power
  Table: Total Electricity Generation Data And Forecasts, 2012-2017
  Table: Total Electricity Generation Data And Forecasts, 2018-2023
Other Key Sectors
  Table: Aut os Sect or Key Indicat ors
  Table: Food and Drink Sect or Key Indicat ors
  Table: Pharma Sect or Key Indicat ors
  Table: Telecoms Sect or Key Indicat ors
  Table: Oi l and Gas Sect or Key Indicat ors
  Table: Infrast ructu re Sect or Key Indicat ors

CHAPTER 6: BMI GLOBAL ASSUMPTIONS

Global Outlook
Emerging Market Deceleration
  Table: Globa l Assumpti ons
  Table: Developed States, Real GDP GrowtH, %
  Table: BMI VER SUS BLOO MBER G CON SEN SUS RE AL GDP GRO WTH FORE CASTS, %
  Table: Em ergi ng Markets , Real GDP Growt h, %

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