Tanzanian authorities have reached an agreement with the International Monetary Fund (IMF) for the disbursement of a $151 million loan to help boost its recovery amidst headwinds from global shocks that have slowed growth.
The amount is subject to approval by the lender’s executive board and will bring IMF’s total financial support to Tanzania under the $1.04 billion 40-month extended credit facility (ECF) agreed on last year July to $302 billion.
IMF said that although the Tanzanian economy is showing signs of steady recovery – with its GDP growing at 4.7 percent last year – global economic conditions continue to weigh down fiscal performance and inflation will likely surpass the Bank of Tanzania’s 5 percent threshold within the year.
“The economy is benefitting from improvements in the business environment, but is also expected to continue facing spill overs of the war in Ukraine in the near term,” said IMF’s Tanzania mission chief Charalambos Tsangarides.
Rise in inflation
The rainfall shortage in the region has also slowed down electricity production and agricultural activity in the country, resulting in a continued rise in inflation rates – currently at 4.9 percent, the lender said.
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