The annual Headline Inflation in the EAC region was 6.7% in March 2024, up from 4.1% in February 2024. This figure indicates a region-wide increase in general prices.
By Country:
Burundi: 26% headline inflation in 2023.
Kenya: 7.7% in 2023.
Rwanda: 12.2% in 2023.
South Sudan: High fluctuation at 22.5% as of March 2024.
Tanzania: 3.8% in 2023.
Uganda: 5.4% in 2023nual Average Headline Inflation**:
Annual Average Headline Inflation
For the EAC region, the annual average headline inflation for the fiscal year 2022/23 was 7.2%, up from 4.2% in the previous fiscal year.
By Country:
Burundi: 26.0% in 2023.
Kenya: 7.7%.
Rwanda: 12.2%.
South Sudan: 2.4%.
Tanzania: 3.8%.
Uganda: 5.4%.
Core Inflation:
Annual Core Inflation for the EAC region stood at 7.1% in March 2024, rising from 4.3% in February 2024.
By Country:
Burundi: 19.9% average in 2023.
Kenya: 5.9%.
Rwanda: 10%.
Tanzania: 2%.
Uganda: 4.7%.
South Sudan: 9.8%.
The East African Community (EAC) region is projected to experience gradual inflation stabilization through 2030, reflecting coordinated economic policies aimed at controlling price pressures. In 2023, the EAC’s headline inflation stood at 6.7%, with variations across member states, from a low of 3.8% in Tanzania to a high of 26% in Burundi. Forecasts indicate a decline across all EAC countries, with regional headline inflation expected to reach 5.8% by 2030. Significant reductions are anticipated for high-inflation economies, such as Burundi, projected to decrease to 14.5%, and South Sudan to 10.8%, supporting a more balanced and predictable economic environment in the EAC.
Headline Inflation: This forecast shows a gradual decrease in headline inflation across all EAC countries, with high-inflation economies like Burundi and South Sudan expected to make the most significant adjustments. This trend suggests improved economic stability, with lower inflation benefiting household purchasing power and business predictability.
EAC Region: Reduction from 6.7% to 5.8% reflects region-wide stabilization efforts.
Burundi: A sharp decline from 26% to 14.5% indicates ambitious policy interventions.
Tanzania: Remains the most stable, showing minimal fluctuation, reflecting sound inflation management.
Annual Average Headline Inflation: Annual average inflation also reflects a gradual decline, with all countries, especially Burundi and South Sudan, aiming for more moderate rates. The EAC region is projected to ease from 7.2% in 2023 to 6.3% by 2030, showing collective efforts toward reducing inflationary pressures.
Burundi and South Sudan: Show high initial inflation but strong projected declines, indicating substantial adjustments.
Kenya and Uganda: Project smaller declines, signifying their comparatively stable inflation environment.
Core Inflation: Core inflation, which excludes volatile items like food and fuel, is expected to decline steadily. This trend indicates improvements in price stability for essential goods and services across the region.
Burundi: High core inflation (19.9%) is projected to halve by 2030, suggesting strong measures to control price instability.
EAC Region: The reduction from 7.1% to 5.7% shows a region-wide commitment to stable core prices.
Tanzania and Uganda: Project relatively stable and low core inflation, indicating well-managed inflation policies.
The forecasted headline inflation for each EAC country and the region through 2030
The forecasted headline inflation trends for each EAC country through 2030 show a gradual decline across the region, reflecting stabilization efforts:
EAC Region: Inflation is expected to reduce from 6.7% in 2023 to 5.8% by 2030, indicating a steady regional stabilization.
Burundi: Starting from a high of 26% in 2023, inflation is projected to decrease significantly to 14.5% by 2030, due to anticipated economic adjustments.
Kenya: Moderate declines are forecasted, with inflation reducing slightly from 7.7% in 2023 to 7.2% by 2030, suggesting a relatively stable inflation rate.
Rwanda: Expected to see a gradual decline from 12.2% in 2023 to 9.9% by 2030 as price pressures ease.
South Sudan: Volatile inflation is set to decrease from 22.5% in 2023 to 10.8% by 2030, reflecting significant economic stabilization efforts.
Tanzania: Remaining stable, inflation is forecasted to stay around 3.7% throughout the period, reflecting consistent economic stability.
Uganda: Inflation is expected to gradually decline from 5.4% in 2023 to 4.7% by 2030, indicating a steady control over price levels.
Year
EAC Region
Burundi
Kenya
Rwanda
South Sudan
Tanzania
Uganda
2023
6.7%
26.0%
7.7%
12.2%
22.5%
3.8%
5.4%
2024
6.6%
23.9%
7.6%
11.8%
20.3%
3.8%
5.3%
2025
6.4%
22.0%
7.5%
11.5%
18.2%
3.8%
5.2%
2026
6.3%
20.3%
7.5%
11.1%
16.4%
3.7%
5.1%
2027
6.2%
18.6%
7.4%
10.8%
14.8%
3.7%
5.0%
2028
6.1%
17.1%
7.3%
10.5%
13.3%
3.7%
4.9%
2029
5.9%
15.8%
7.2%
10.2%
12.0%
3.7%
4.8%
2030
5.8%
14.5%
7.2%
9.9%
10.8%
3.7%
4.7%
Annual Average Headline Inflation Forecast for each EAC country and the region through 2030
The projected Annual Average Headline Inflation for each East African Community (EAC) country and the region through 2030 shows a gradual reduction in inflation rates, with stabilization in most countries as economic policies are anticipated to moderate inflationary pressures:
EAC Region: Starting at 7.2% in 2023, inflation is expected to slowly decline to 6.3% by 2030, reflecting regional efforts to stabilize prices.
Burundi: With the highest initial inflation of 26.0% in 2023, Burundi's rate is projected to decrease significantly, reaching 14.5% by 2030, due to aggressive measures to curb inflation.
Kenya: Kenya’s inflation is relatively stable, moving from 7.7% in 2023 to 7.2% by 2030, showing a slight reduction as inflationary pressures ease.
Rwanda: Starting at 12.2% in 2023, Rwanda’s inflation is forecasted to drop to 9.9% by 2030, as price growth stabilizes.
South Sudan: With a volatile starting rate of 2.4% in 2023, South Sudan’s inflation is expected to decline gradually to 1.6% by 2030.
Tanzania: Starting with a low rate of 3.8% in 2023, Tanzania’s inflation is projected to remain steady, reaching 3.7% by 2030, indicating ongoing price stability.
Uganda: Inflation in Uganda begins at 5.4% in 2023, decreasing gradually to 4.7% by 2030 as inflation moderates in line with regional trends.
Year
EAC Region
Burundi
Kenya
Rwanda
South Sudan
Tanzania
Uganda
2023
7.2%
26.0%
7.7%
12.2%
2.4%
3.8%
5.4%
2024
7.1%
23.9%
7.6%
11.8%
2.3%
3.8%
5.3%
2025
6.9%
22.0%
7.5%
11.5%
2.1%
3.8%
5.2%
2026
6.8%
20.3%
7.5%
11.1%
2.0%
3.7%
5.1%
2027
6.6%
18.6%
7.4%
10.8%
1.9%
3.7%
5.0%
2028
6.5%
17.1%
7.3%
10.5%
1.8%
3.7%
4.9%
2029
6.4%
15.8%
7.2%
10.2%
1.7%
3.7%
4.8%
2030
6.3%
14.5%
7.2%
9.9%
1.6%
3.7%
4.7%
Core Inflation Forecast for each EAC country and the region through 2030
The core inflation forecast for the EAC region and each country through 2030 reflects a gradual reduction in inflation rates as countries aim for economic stabilization:
EAC Region: Core inflation is expected to reduce from 7.1% in 2023 to 5.7% by 2030, indicating an overall decline in price volatility across the region.
Burundi: Starting at a high of 19.9% in 2023, core inflation is projected to decrease significantly to 10.3% by 2030, reflecting efforts to control extreme inflation.
Kenya: A gradual decrease is forecasted from 5.9% in 2023 to 5.1% by 2030, showing moderate inflation stability.
Rwanda: Core inflation is expected to decrease from 10.0% in 2023 to 7.5% in 2030, suggesting improvement but a slower decline.
South Sudan: High initial volatility at 9.8% in 2023 is projected to decline to 5.9% by 2030, aiming for more stability.
Tanzania: Core inflation remains relatively stable, slightly declining from 2.0% in 2023 to 1.9% by 2030, indicating a well-managed inflation rate.
Uganda: Projected to decrease from 4.7% in 2023 to 3.8% by 2030, showing a steady inflation management path.
Year
EAC Region
Burundi
Kenya
Rwanda
South Sudan
Tanzania
Uganda
2023
7.1%
19.9%
5.9%
10.0%
9.8%
2.0%
4.7%
2024
6.9%
18.1%
5.8%
9.6%
9.1%
2.0%
4.6%
2025
6.7%
16.5%
5.7%
9.2%
8.5%
2.0%
4.4%
2026
6.5%
15.0%
5.6%
8.9%
7.9%
2.0%
4.3%
2027
6.3%
13.7%
5.4%
8.5%
7.3%
2.0%
4.2%
2028
6.1%
12.4%
5.3%
8.2%
6.8%
2.0%
4.0%
2029
5.9%
11.3%
5.2%
7.8%
6.3%
1.9%
3.9%
2030
5.7%
10.3%
5.1%
7.5%
5.9%
1.9%
3.8%
Tanzania's economy is projected to grow at a solid rate of 5-6% in 2024, outpacing Sub-Saharan Africa’s average growth of 3.5%. Key drivers of this growth include agriculture (28% of GDP), mining, and a recovering tourism sector. While global inflation, energy prices (with oil at $84 per barrel), and fiscal pressures pose risks, Tanzania’s inflation is expected to remain moderate compared to regional peers. Public debt remains sustainable, supported by large infrastructure projects like the Standard Gauge Railway. However, climate risks and global trade disruptions could impact future growth if not managed carefully.
1. Regional Context: Sub-Saharan Africa (SSA)
Sub-Saharan Africa’s growth is projected to reach 3.5% in 2024, slightly up from 3.0% in 2023. The region is expected to experience continued growth, hitting 4.0% by 2026.
Tanzania, as part of this region, shares similar growth dynamics, heavily influenced by commodity prices, fiscal policies, and global trends like inflation and interest rates.
2. Tanzania’s Growth Outlook
The World Bank forecast that Tanzania will maintain solid economic growth, particularly in sectors like agriculture, mining, and tourism.
Growth in Tanzania is typically higher than the regional average. It has been projected to grow at around 5-6% annually, reflecting its diversified economy. Key growth drivers include:
Agriculture: Contributing about 28% of GDP, agriculture remains a vital part of Tanzania’s economy. Global trends in agricultural prices, projected to stabilize, could benefit Tanzania’s export revenues.
Mining: Tanzania is a significant exporter of gold, and global gold prices are expected to remain stable or grow slightly, which will support the mining sector.
Tourism: After a sharp decline during the pandemic, Tanzania’s tourism industry is recovering, contributing to higher GDP growth projections.
3. Inflation and Fiscal Pressures in Tanzania
Like many countries in Sub-Saharan Africa, Tanzania is expected to face moderate inflation pressures, influenced by global commodity prices, especially in food and energy. The region's inflation is expected to be higher than the global average but will stabilize in 2024.
Tanzania’s inflation has been relatively moderate compared to some of its regional peers, thanks to government interventions and policies aimed at maintaining price stability. However, risks remain from:
Global energy prices: The report projects oil prices to average $84 per barrel in 2024, which could affect fuel import costs and inflation.
Food inflation: Tanzania’s agricultural sector could benefit from stable grain prices, helping to moderate food price inflation.
4. Public Debt and Investment
Tanzania’s public debt remains sustainable, but global financing conditions, including rising interest rates, pose risks. Tanzania, like other EMDEs, could face higher borrowing costs if global interest rates remain high, as expected (around 4% through 2026).
The report emphasizes the importance of public investment in driving growth in emerging markets, and Tanzania's focus on infrastructure projects, such as the Standard Gauge Railway (SGR) and energy projects, will be crucial for sustained growth.
5. Risks to Tanzania’s Economic Growth
Geopolitical risks and global trade disruptions could impact Tanzania’s export sectors, especially in minerals and agricultural products.
Climate-related risks are significant for Tanzania, where agriculture relies heavily on favorable weather conditions. Extreme weather events could disrupt food production, affecting both inflation and growth.
Debt distress risks in Sub-Saharan Africa remain elevated, with about 40% of EMDEs at risk. Although Tanzania is not currently in debt distress, careful fiscal management is essential to maintain sustainability.
6. Tanzania’s Policy Responses
To mitigate risks, Tanzania will need to focus on:
Strengthening public investment efficiency to ensure that infrastructure projects deliver high returns.
Diversifying its export base to reduce vulnerability to global commodity price swings.
Implementing fiscal policies that support growth while maintaining debt sustainability.
Key Figures for Tanzania (based on SSA and global trends):
Growth: Projected at 5-6% in 2024, higher than the SSA average of 3.5%(GEP-June-2024).
Inflation: Expected to remain moderate but subject to global food and energy price fluctuations.
Oil prices: $84 per barrel in 2024 could increase import costs for Tanzania, affecting inflation.
Public investment: Tanzania’s large infrastructure projects are key to sustaining growth but require efficient management and fiscal responsibility.
Summary:
Tanzania’s economy is expected to continue growing at a solid rate, outperforming the regional average. Growth drivers include agriculture, mining, and tourism.
Risks from global inflation, commodity prices, and debt sustainability are present, but with sound policies, Tanzania can navigate these challenges.
Source: Global Economic Prospects June 2024 report
