Account deficit widens on imports
TANZANIA: THE current account deficit widened by nearly 40 per cent in the year through May as higher import costs, driven by global geopolitical tensions and elevated freight charges, outpaced strong growth in exports and tourism earnings, according to official data.
The current account deficit increased to 2.91 billion US dollars in the year ending May from 2.09 billion US dollars a year earlier as imports of goods and services rose faster than exports amid persistently high global commodity prices and rising maritime shipping costs.
The Bank of Tanzania (BoT) latest Monthly Economic Report shows that despite the wider deficit, exports of goods and services climbed 15.6 per cent to 19.30 billion US dollars, supported by higher earnings from gold, manufactured goods and tourism, which together accounted for more than 60 per cent of total export receipts.
Goods exports rose 20.4 per cent to 11.63 billion US dollars from 9.65 billion US dollars, driven by stronger shipments of gold, manufactured products, tobacco and coffee.
Gold remained the country’s largest export earner, with receipts surging 46.7 per cent to 5.53 billion US dollars from 3.77 billion US dollars, reflecting higher international prices and increased domestic production.
Manufactured exports increased 38.3 per cent to 2.0 billion US dollars, supported by strong regional demand for iron and steel products as well as glassware.
Traditional exports also strengthened, rising 12.8 per cent to 1.64 billion US dollars as higher tobacco export volumes, favourable coffee prices and improved cotton prices and volumes boosted earnings.
On a monthly basis, goods exports jumped 75 per cent to 963.3 million US dollars in May from 550.4 million US dollars in the same month last year, largely on stronger gold and manufactured goods exports.
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Service receipts increased 8.9 per cent to 7.67 billion US dollars from 7.05 billion US dollars, underpinned by growth in travel and transport services.
Tourism receipts rose 7.8 per cent to 4.35 billion US dollars as international tourist arrivals increased 5.9 per cent to 2.30 million visitors during the period.
Transport services generated 2.87 billion US dollars, up 14.2 per cent, reflecting higher freight earnings from transit cargo and reinforcing Tanzania’s position as a regional logistics and trade gateway.
Monthly service receipts were broadly unchanged at 528.7 million US dollars in May compared with the same month a year earlier.
The figures underscore the resilience of the country’s export sectors despite mounting external pressures, although higher import costs continue to weigh on the country’s external balance as geopolitical tensions disrupt global supply chains and keep shipping and commodity prices elevated.
