Tanzania Investment and Consultant Group Ltd

| Economic Research Centre

Economists Talk Magazine September
September 1, 2023  
Inflation Rates: Money Supply: Import Rates: Export Rates: National Debts: Budget Analysis:

Inflation Rates:

  • The inflation rate has dropped from 3.6% to 3.3% last month, and further analysis reveals a reduction to 3.1%.
  • Inflation rate for all products has decreased by -0.1% in one month.
  • Notable decreases were observed in food and nonalcoholic beverage inflation (-1.2% in one month, but up by 6.1% in a year), while alcoholic beverage and tobacco inflation increased by 2% in one month and by 3.8% in a year.
  • Clothing and footwear prices increased by 0.1% in one month and by 3.4% overall.
  • Household maintenance costs grew by 0.5% in one month and 2.7% in a year.
  • Transport prices rose by 0.9% in a month and 0.4% over a year.

Money Supply:

  • Money circulation surged by 68.2% in one month, increasing from 38.7% the previous month, but decreased from 64% last year.
  • The rise in money supply is attributed to the Bank of Tanzania increasing circulation from -11.5% last month to 0.2% this year.
  • Currency circulation increased by over 15.5% this month and narrow money supply (M1) expanded by 19.3%.

Import Rates:

  • Over a year, import rates increased by 739%, but in one month, it plummeted by 70%.
  • Several items had varying import rates in a year, such as machinery and mechanical appliances (increased by 38% in a year but decreased by 29% within the year).
  • Import rates for some products like petrol, lubricants, wheat grain, and pharmaceutical products exhibited varying trends.

Export Rates:

  • Export rates grew by 4% in one year and 13% within two years.
  • Notable changes were seen in the export rates of manufactured goods, traditional goods, horticultural products, and cereals.

National Debts:

  • The national debt has exceeded USD 42 billion, with domestic debt increasing by 2% in a month and 20% in a year.
  • External debt increased by 1% in a month and 8% over a year.

Budget Analysis:

  • The government's expenditures are surpassing the budget estimate, leading to a 36% increase in expenditures compared to estimated revenue.
  • Interest costs have exceeded the budget projection by 151%, and income tax revenue has declined by 5%.
  • This has contributed to a growing government deficit, exceeding 36%.

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