Current account deficit narrows significantly
DAR ES SALAAM: THE external sector showed notable improvement, with the current account deficit narrowing to 2.02 billion US dollars from 2.93 billion US dollars in the same period last year, driven primarily by stronger growth in export earnings relative to imports.
According to the latest Bank of Tanzania (BoT) monthly economic review, this development signals increased global demand for Tanzanian goods and services.
“Such an improvement not only eases pressure on foreign exchange reserves and strengthens the balance of payments, narrowing deficit but also helps bolster the Tanzanian shilling by supporting exchange rate stability and enhancing investor confidence in the country’s economic outlook,” the Bank stated.
During the year ending March, exports of goods and services grew by 17.2 per cent to 16.51 billion US dollars from 14.08 billion US dollars in the corresponding period last year.
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The increase was mainly driven by exports of gold, travel (tourism), agricultural products and transportation services. Exports of goods, which account for 58 per cent of the total exports of goods and services, rose to 9.58 billion US dollars from 7.70 billion US dollars during the period ending March last year.
The increase in exports was notable for gold, cashew nuts, tobacco, coffee and horticultural products. Gold exports increased to 3.77 billion US dollars compared with 3.11 billion US dollars last year mainly owing to favourable prices in the world market. Traditional exports also rose on account of increased production of cashew nuts and coffee.
A slowdown was registered in the export of manufactured products due to a decrease in exports of fertilizers, cement and wheat flour, suggesting increased domestic consumption.
On a monthly basis, exports of goods were 721.9 million US dollars in March this year, up from 532.7 million US dollars in March last year. During the review period, service receipts increased by 8.5 per cent to 6.92 billion US dollars from 6.38 billion US dollars last year owing to the increase in travel (tourism) receipts, which accounted for 56.7 per cent of service receipts.
The increase in travel receipts resulted from a surge in international arrivals to 2,148,427 in the year ending March this year from 1,919,447 in the corresponding period last year.
During the review period, service receipts increased by 8.5 per cent to 6.92 billion US dollars from 6.38 billion US dollars last year, owing to the increase in travel (tourism) receipts, which accounted for 56.7 per cent of service receipts.
The increase in travel receipts resulted from a surge in international arrivals to 2,148,427 in the period ending March this year from 1,919,447 in the corresponding period last year.
