Tanzania’s economic growth could fall to 4% this calender year due to effects of the coronavirus pandemic, according to Finance Minister Philip Mpango. Economic expansion “could further decline depending on the extent of the impact of the coronavirus outbreak on different sectors of the economy,”
Mpango told lawmakers on Friday in a presentation seen by Bloomberg. Tanzania’s economy grew 7% in 2019 and was expected to expand by a similar pace this year before the virus took it’s toll on the East African nation.
Inflation is expected to remain below 10%, while the budget deficit could widen to 2.8% of gross domestic product, he said.
The financing gap was initially forecast at 2.6% of GDP for fiscal 2020-21, up from a projected 2.3% in the previous corresponding period.
Mpango said his ministry had concluded an assessment of the impact of the virus on the economy and was currently reviewing appropriate fiscal measures.
Tanzania’s monetary policy committee on Tuesday reduced its benchmark interest rate and its minimum reserve requirement for the first time in almost two years to protect financial stability amid the health crisis.
The discount rate, or what banks and the government pay for central bank loans, was lowered to 5% from 7% and the minimum reserves requirement lowered to 6% from 7%.