1 / 37

A REVIEW OF RECENT MACROECONOMIC PERFORMANCE

A REVIEW OF RECENT MACROECONOMIC PERFORMANCE. OUTLINE. OVERVIEW GDP GROWTH THE GLOBAL FINANCIAL AND ECONOMIC CRISIS PRICE MOVEMENTS GOVERNMENT FINANCE Revenue Expenditure Foreign Resources NATIONAL DEBT DEVELOPMENTS External Debt Domestic Debt. OUTLINE (Contd 1 ).

paki-estes
Télécharger la présentation

A REVIEW OF RECENT MACROECONOMIC PERFORMANCE

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. A REVIEW OF RECENT MACROECONOMIC PERFORMANCE

  2. OUTLINE • OVERVIEW • GDP GROWTH • THE GLOBAL FINANCIAL AND ECONOMIC CRISIS • PRICE MOVEMENTS • GOVERNMENT FINANCE • Revenue • Expenditure • Foreign Resources • NATIONAL DEBT DEVELOPMENTS • External Debt • Domestic Debt

  3. OUTLINE (Contd1) • MONEY AND CREDIT DEVELOPMENTS • Money Supply • Credit to the Private Sector • Interest Rates Developments • Exchange Rates • THE SECOND GENERATION FINANCIAL SECTOR REFORM • EXTERNAL SECTOR PERFORMANCE • Exports • Imports • Balance of Payments

  4. OUTLINE (Contd2) • PRIVATE SECTOR DEVELOPMENT • Investments • Foreign Direct Investment

  5. OVERVIEW • Strong economic performance • Despite the impact of the global financial/economic crisis • GDP growth • 7.4% in 2008 • 7.1% in 2007 • Projected to grow at 5.0% in 2009 • Impact of the global financial/economic crisis • Prolonged drought

  6. OVERVIEW (Contd) High growth registered in Communications (20.5%) Financial intermediation (11.9%) Construction (10.5%) Substantial slowdown registered in Mining and Quarrying 10.7% (2007) 2.5% (2008) Electricity and gas 10.9% (2007) 5.4% (2008)

  7. Trends in selected macroeconomic indicators 2000 - 2008

  8. REAL GDP GROWTH RATES

  9. Trends in GDP Performance: 2000 - 2008

  10. GLOBAL ECONOMIC RECESSION AND THE MEDIUM TERM OUTLOOK • The global economy pulling out the recession (October 2009 WEO) • Stabilization uneven • Recovery to be slow • Financial conditions improving, more than expected, owing mainly to Government intervention in: • Public capital injection • Easing monetary policy stance • Fiscal stimulus packages

  11. GLOBAL ECONOMIC RECESSION AND THE MEDIUM TERM OUTLOOK (Contd) • Global economic forecasts • To contract in 2009 by 1.4% • Expand in 2010 by 2.5% • Growth in emerging Asian economies revised upwards to 5.5% in 2009 rising to 7.0% by 2010

  12. GLOBAL ECONOMIC RECESSION AND THE MEDIUM TERM OUTLOOK (Contd) • Tanzania like all other countries affected by the Global financial/economic crisis, albeit to a lesser extent • GDP Growth expected to slow down to 5.0% in 2009 • GDP growth expected to pick up in the medium-term • Mitigating measures • Rescue package • Ensure food security • Protect employment • Support critical social programmes • Protect potential investment • Kilimo Kwanza

  13. GLOBAL ECONOMIC RECESSION AND THE MEDIUM TERM OUTLOOK (Contd) • Mitigating measures • Through • Compensation to losses • Coffee, cotton etc. • Guarantees for exporters and SMEs • Expanded fertilizer subsidy • Operational guidelines on condition of access, procedures of evaluations, eligibility etc. put in place

  14. INFLATION TRENDS • Inflation has remained high • Lower food production (bad weather) • Food shortages in neighbouring countries • Cross-border trade • Headline inflation at 12.7% in October 2009, having risen from 11.6 in September 2009 • Food inflation at 18.1 % in October 2009 from 13.4% in September 2009 • Non-food inflation declined from 9.0% to 4.4% during the same period • Decline in fuel prices trade

  15. Overview of the World Economic Outlook Projections

  16. INFLATION TRENDS • Inflation under 5.0% since 2001 • Hovering around 4.0% until mid-2004 when it started inching up, reaching 6.5% in March 2006 • Food shortages • Drought • Cross-border trade • Petroleum prices • Expected harvests to improve food supplies • Inflation expected to decline

  17. Monthly Inflation Trend 2008 - 2009

  18. Government Finance 18 • Revenues • Revenue collection for 2008/09 was 10% below the target mainly on the account of the impact of GFC . • Total domestic revenue was 15.9% of GDP compared to 16.0% in 2007/08 • The government borrowed 1.2 percent of GDP (Tsh 357.8 billion) from domestic sources to fix the gap . • Revenue collection has increased in absolute terms by 18.1% in the period under review • Monthly average collection has doubled from Tshs. 177.1 billion in 2005/06 to 357.8 billion in 2008/09

  19. Government Finance. 19 Revenues (contd) • The Fiscal Performance during July – Sept. 2009/10 also characterized by a shortfall in revenue collection • Domestic revenue =Tshs 1,107.2 billion, equivalent to 87.4% of the target for the period compared to 96% last year • Total grant for the period under review was Tshs 494 billion, equivalent to 60% of the target.

  20. Government Finance 20 • Expenditure • Total expenditure in 2008/09 was 25.3% of GDP compared to 22.9% in 2007/08 • 95.0% of the total estimate for the period • Dev. expenditure was 14.0% below budget estimates while recurrent expenditure was broadly in line with budget estimates • Expenditure during the first quarter of 2009/10 was 88.4% of the target compared to 81% • Recurrent and dev. expenditures in the same period was 86 and 94 % of the estimate respectively, higher compared to 85 and 73% percent respectively in year 2007/08

  21. National Debt 21 • As at end-September 2009 the National debt stock at US$ 9,330.9 million, • 80.1% is external debt • 19.9% is domestic. • Out of the total external debt, USD 5,932.8 million or 79.4 percent is disbursed outstanding debt (DOD) and the remaining amount of USD 1,541.4 is interest arrears. • Government is the largest borrower, owing 69.6% of the total external debt followed by the private sector (20.3%) and public corporations (10.1%) • External payments for the quarter amounted to USD 26.8 million, equivalent to 1.9% of export of goods and services.

  22. Money and Credit Developments 22 During the year ending September 2009 • M2 grew at an annual rate of 19.9% compared to 29.4% Sept 2008. • M3 grew by 19.5%, compared to 21.2% Sept. 2008. Contributing factors: • Slowdown in the growth rate of credit to the private sector • Deceleration of the stock of reserve money (M0) from 42.4% Sept 2008 to 22.3% • The decision to raise central government deposits from 10% to 20% in January 2009

  23. Annual Growth Rates of Monetary Aggregates

  24. Money and Credit Developments (contd) 24 During the year ending September 2009 • Growth rate of commercial bank credit to the private sector increased by 26.6%, compared to 31.8% for the period ended Sept 2008. • No significant change in the composition of credit to various activities • Personal loans continued to dominate with 20.4% of the total loan; followed by trade (18.7%) and agric (11.7%).

  25. Money and Credit Developments During the year ending September 2009 Overall time deposit rate improved slightly to an average of 6.63% from 6.59% in Sept 2008. Negotiated deposit rates decreased to 9.27% from an average of 10.27% in Sept 2008 Savings deposit rates have generally stabilized at around 2.7% On the other hand: Overall lending rate averaged 14.90%, the same rate as it was in Sept 2008 Negotiated lending rate increased slightly to 13.81% from 12.91% in Sept 2008 Short term (up to one year) lending rate decreased to 13.98% from 14.04% in Sept 2008

  26. Second Generation Financial Sector Reform 26 • Tanzania’s financial sector is undergoing comprehensive reforms under the joint World Bank-IMF Financial Sector Assessment Program (FSAP) • The recent assessment of the program has shown substantial progress in the development and stability of the financial sector and liquidity management • The banking system is generally well capitalized and sound, notwithstanding a modest increase in non-performing loans in the wake of the GFC

  27. Second Generation Financial Sector Reform 27 The Government continues with implementation of various activities under the Second Generation Financial Sector Reform program As part of these reforms, the Government is transforming the Tanzania Investment Bank (TIB) into a Development Finance Institution (DFI) The Mortgage Financing Act and the Unit Title Act were passed by parliament in November 2008 Processesare ongoing to secure funding for the establishment of a mortgage liquidity facility whose objective is to expand access to affordable housing

  28. External Trade Performance 28 • Exports • Export earnings (Goods and services) increased by 3.2%, from USD 4463.7million in Sept 2008 to USD 4,606.6 million in Sept 2009. • The increase was attributed to: • The increase in the value of tradition exports specifically coffee, tobacco and cloves. • Improved export performance in manufactured goods, horticultural products, fish and fish products • Services receipts decreased by 2.6% mainly caused by 18% decline in transportation receipts resulting from GFC. • Travel (including tourism) which accounts for about 60% of services receipts recorded a marginal increase of 0.9%.

  29. Tanzania’s Exports by Major Category (mil. USD)

  30. Tanzania’s Exports by Major Category (mil. USD)

  31. Tanzania’s Exports by Major Category (mil. USD)

  32. Share of Goods Export Earnings for the Year ending September 2009

  33. 33 • Imports • Imports of goods declined by 7.8% during the period ending September 2009 • Decrease in imports of intermediate goods particularly oil • Imports volume of oil during the period increased by 31.9 BUT the value of oil imports declined by 24.2% • Decline in oil prices in the world market • The world market price of oil declined by 45.4% from USD 977.0 million per ton to USD 533.7 million per ton as a result of the global economy recession. • Service payments rose by 9.1 percent to USD 1,687.3 million

  34. Current Account Balance (US Dollars million)

  35. Shares of Imports for the Year Ending September 2009

  36. Balance of Payments 36 • The overall balance of payment recorded a surplus of USD 620.4 million up from a deficit of USD 115.1.million recorded in the preceding year. • Mainly attributed to the reduction in the current account deficit as a result of an increase in exports of goods and services coupled with a decline in the imports bill. • Gross reserve position stood at USD 3,560.3 million as at end September 2009 • This level of reserve was enough to cover about 5.7 months of imports of goods and services

  37. Private Sector Development 37 • The cost of doing business in Tanzania • Increased from 124th country out of 181 countries in 2007 to 131st out of 183 countries in 2008 (World Bank Doing Business Report of 2010 • In 2008, TIC approved 871 projects • o/w 621 were new and 250 were either rehabilitation or expansions • Of the approved projects • 450 were owned by local, • 208 were foreign • 213 were Joint Ventures

More Related