Tanzania’s current account deficit narrows

TANZANIA: TANZANIA’s current account deficit narrowed to 2,760.7 million US dollars in the year ending January this year compared to 5,160.1 million US dollars on account of the decline in import bills.

The Bank of Tanzania (BoT) monthly economic review for February shows that the current account narrowed notwithstanding the external shocks that continued to exert pressure on the current account position, foreign exchange reserves and exchange rate.

“The import bill declined due to the moderation in commodity prices, particularly oil, coupled with earnings from tourism activities and nontraditional exports,” the BoT report stated.

During the period under review, the stock of foreign exchange reserves increased to 5,107.1 million US dollars from USD 4,807.8 million US dollars in the corresponding period a year before.

The reserves were adequate to cover 4.2 months of projected imports of goods and services and above the country’s benchmark of four months.

According to the central bank report, the export of goods and services increased by 14.8 per cent to 14,119 million US dollars in the year ending January from the level recorded in the preceding year, driven mainly by tourism receipts, gold and traditional exports.

The export of non-traditional goods rose by 2.1 per cent to 6,332 million US dollars with much of the increase registered in exports of gold.

The exports of gold was 3,075.9 million US dollars higher than 2,904 million US dollars in the period ending January in the preceding year on account of both volume and price effects.

The increase was also registered in exports of oil seeds and horticulture products, particularly vegetables.

The export of traditional goods edged up to 989.5 million US dollars from 754.6 million US dollars largely driven by exports of coffee and tobacco.

Service receipts amounted to 6,372.9 million US dollars from 4,937.1 million US dollars in the period ending January last year driven by travel (tourism) and transport receipts.

The rise in travel receipts reflects the rebound of the tourism sector, with tourist arrivals increasing by 22.2 per cent to a record-breaking 1,841,750. Month-on-month, service receipts were 608.4 million US dollars in January this year compared with 516.3 million US dollars in January last year

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