Tanzania current account deficit narrows
DAR ES SALAAM: THE current account deficit narrowed to 2.21 billion US dollars in the year ending October, down from 3.28 billion US dollars in the same period in 2023, driven by export growth and favourable global commodity prices.
The latest Bank of Tanzania (BoT) monthly economic review for November attributes the improvement to a strengthened external sector, reflecting the recovery of global economic conditions.
“Increased exports, particularly from key sectors, enhanced revenue inflows, while higher global prices for commodities benefited exporting industries, offsetting the cost of imports,” the BoT report stated.
The Bank report revealed that exports of goods and services reached 15.49 billion US dollars in the year ending October, marking a 12.9 per cent increase from the previous year.
“The growth was driven by a strong rebound in tourism and increased exports of key commodities, including gold, tobacco, cashew nuts and horticultural products,” BoT said.
According to BoT, the exports of traditional goods rose to 1.15 billion US dollars in the year ending October, up from 910.2 million US dollars in 2023 driven by strong performance in tobacco, coffee and cashew nuts.
The Bank further noted a significant increase in nontraditional exports, which rose to 6.92 billion US dollars from 6.35 billion US dollars with gold contributing 47.8 per cent of the total.
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The BoT report stated that export of horticultural products improved to 496.2 million US dollars from 414.6 million US dollars in the year to October 2023 driven by vegetables.
On month-to-month, exports of goods amounted to 940.4 million US dollars in October compared with 693.2 million US dollars in a similar period in 2023.
According to the BoT report, the service receipts increased to 6.95 billion US dollars from 6.04 billion US dollars in the year ending October 2023, with earnings from travel (tourism) and transport services backing the performance.
Travel receipts increased by 19.7 per cent to 3.67 billion US dollars explained by a sustained rise in tourist arrivals that reached 2.095 billion US dollars in the year ending October following sustained government and private sector promotion efforts.
Meanwhile, transport earnings, mainly from freight charges, increased to 2.69 billion US dollars from 2.34 billion US dollars in the year to October 2023, mainly due to improvements in ports efficiency and transport infrastructure.
A month-on-month analysis also indicates a notable improvement in service receipts, rising to 616 million US dollars from 607.7 million US dollars in October 2023
