IMF is impressed by Tanzania's economic growth

Lukwangule · 2010-03-17T08:33:26+00:00

The International Monetary Fund (IMF) is impressed by Tanzania's economic growth as the East African country has reduced inflation from double to single digit with falling interest rates on loans, the local newspaper Daily News reported on Wednesday. David Robinson, IMF's Senior Resident Representative in Tanzania, made the remarks at a joint news conference with Tanzanian Finance and Economic Affairs Minister Mustafa Mkulo here on Monday, according to the report. Robinson said that the IMF would follow up on implementation of a Policy Support Instrument agreed with the government in February, 2008, adding that the Fund was impressed by the progress made in Tanzania and approved the government to borrow preferably through sovereign bond. He noted that the IMF think it's the correct time for the government to float the bond as international markets are now picking up. The IMF advised the government in 2008 to suspend the process of floating the 500 million US dollars (650 billion Tanzanian shillings) bond because of volatile international markets and the global recession. However, the IMF chief said the government revenue did not perform well as forecasted because of global recession and other local factors. For his part, Mkulo said he expects inflation to drop to less than 8 percent, while lending rates would go down to less than 10 percent by next June with changed government policies, which include subsidizing agriculture inputs in food producing areas. Tanzania's year-on-year inflation rate slowed to 9.6 per cent in February from 10.9 percent in January as the year-on-year food inflation rate slowed to 10.1 percent in February from 11.3 percent in January, according to National Bureau of Statistics. Food prices constitute over 50 percent of the sample basket that determines inflation rate in Tanzania. The Tanzanian minister also said that the process of floating the bond which was suspended in 2008 because of advice from IMF on global recession, was well under way. Meanwhile, a team of experts from Treasury, Bank of Tanzania Investment Center and other relevant institutions has been formed to advise the government on process of floating a sovereign bond on the international markets.

Thread starter Lukwangule
Start date Mar 17, 2010

Lukwangule

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IMF is impressed by Tanzania's economic growth

Lukwangule

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