Inflation Rate:

In September 2023, Tanzania's headline inflation rate held steady at 3.3%, remaining unchanged from the previous month, August 2023, but marking a noticeable decline from the previous year, September 2022, when it was 4.8%. Despite this stable inflation rate, the overall index of prices increased from 108.73 in September 2022 to 112.35 in September 2023, indicating a general rise in the prices of goods and services over the course of a year. This tells that, on average, prices in the Tanzanian economy were higher in September 2023 compared to September 2022, despite the headline inflation remaining constant, reflecting the importance of considering long-term trends in price levels alongside short-term inflation rates.

GDP Growth Rate:

Tanzania's GDP growth rate stands at a healthy 5.6 percent, indicating a steady upward trajectory. Comparing it to previous years, there's a consistent increase from 5.5 percent in 2022 and 5 percent in 2021. Key contributing sectors include agriculture, construction, mining, trade, manufacturing, finance, and insurance.

Money Supply:

In August 2023, Tanzania's money supply experienced significant fluctuations in various components, with notable changes in net foreign assets, central bank assets, and different money supply measures. Net foreign assets surged by 113% in one month, indicating a substantial influx of foreign currency, possibly driven by foreign investments or trade balances. The growth in the Bank of Tanzania's assets suggests active monetary policy interventions to stabilize or stimulate the economy. Conversely, net domestic assets and domestic claims decreased, reflecting a contraction in domestic lending and money creation, possibly aimed at addressing monetary concerns. The slight increase in claims on the private sector suggests banks' willingness to extend credit to support economic activity, while the decline in the extended broad money supply (M3) may impact spending and investment. Reduced foreign currency deposits may affect exchange rates and international trade, and contractions in M2 and M1 may influence economic liquidity and consumer spending. An increase in currency in circulation and a decrease in transferable deposits could be indicative of shifts in consumer preferences and financial stability. Overall, these monetary contractions may raise concerns about short-term economic activity, but the efforts to increase net foreign assets and central bank assets signal long-term economic growth and stability.

Import and Export Rate:

Tanzania's trade performance from 2021 to the projected 2023 reveals significant trends. Export of goods and services demonstrated robust growth, with a 43% increase over this period, showcasing Tanzania's successful expansion of its international market presence. Conversely, imports grew by 61%, outpacing exports and leading to a widening trade deficit. The balance of payment, representing the gap between exports and imports, went from a negative balance of -$1,063 million in 2021 to -$3,597.6 million in 2022 but improved slightly to -$3,361.7 million in 2023, marking a 7% reduction in the negative balance. This indicates efforts to address the trade imbalance, emphasizing the importance of managing trade imbalances for long-term economic stability and sustainability in Tanzania.

Budget Analysis:

The Government Budget Performance Evaluation for August 2023 reveals critical insights into Tanzania's fiscal situation for the year, comparing 2022 and 2023 financial data. Notably, government expenditure exceeded the budget due to increased development expenditure, while revenue collection fell short, resulting in a concerning deficit expansion. Government expenditure categories such as wages, salaries, interest costs, and development expenditure saw fluctuations, with wages and salaries and interest costs falling below budget and development expenditure surpassing it.

In terms of government revenues, both tax and non-tax sources underperformed compared to budget projections, leading to a significant deficit increase of 56%. These findings signal challenges in revenue collection and deficit management, potentially hindering economic growth. To address these issues, the government should prioritize improving tax collection, managing deficits, and exploring alternative revenue sources. The focus on development expenditure is a positive step towards fostering economic growth, but the revenue shortfall and deficit increase pose potential obstacles to sustainable economic development.

National Debts:

In August 2023, Tanzania's national debt amounted to USD 40,574.6 million, with a significant portion of it being external debt. This reduction in debt can be attributed to exchange rate fluctuations, particularly the appreciation of the US dollar. The composition of the debt reveals that 70.5 percent of it is owed to foreign creditors, indicating a substantial reliance on foreign borrowing. The data indicates that over the past year, external debt increased by 4% while domestic debt increased by 16%, contributing to a 7% increase in the total national debt. Short-term changes show a 3% decrease in external debt and a 3% increase in domestic debt in a month. It's essential to assess the sustainability of this growing debt burden concerning the country's economic growth.

In the Government Budget Performance Evaluation for August 2023, it is noted that government expenditure exceeded the budget due to higher development expenditure, while revenue collection fell short of expectations, resulting in a widening deficit. The actual government revenues in 2023 were 7% less than the budgeted amount, primarily driven by declines in income tax and other tax revenues. This significant budget deficit increase of 56% raises concerns about fiscal management and may lead to increased government borrowing. The government must address revenue collection challenges, manage deficits effectively, and explore alternative revenue sources while prioritizing development expenditure for economic growth.