Most of the country's Chief Executive Officers (CEOs) are confident that the economy will grow in the next twelve months, PwC's latest survey shows.
The PwC's 2023 CEO Survey dubbed 'Winning today's race while running tomorrow's Evolve or die,' showed that 68 per cent out of 71 CEOs in the country are positive about the future, forecasting good economic growth in the short and medium-term, albeit not as optimistic as in the prior year survey of 78 per cent.
"This optimism is mirrored in a recent IMF press release" stating 'the economy is benefitting from improvements in the business environment' according to the latest PwC report.
The PwC's 26th Annual Global CEO Survey1 polled 4,410 CEOs in 105 countries and territories in October and November last year, including 71 respondents from Tanzania.
The CEOs in the country further said they do recognise that there are threats to the region's economic growth, with inflation and macroeconomic volatility ranking higher in the short term.
Additionally, Tanzania CEOs are very confident of their respective company's prospects for revenue growth both in the next 12 months (54 per cent) and the next three years (63 per cent).
The report also states that "contingent on the implementation of the authorities' structural reform agenda, including the business environment and governance, real GDP growth is projected to rebound to about 7.0 per cent over the medium term.
"Inflation is expected to return to the (Bank of Tanzania) BoT's target, and the current account deficit to moderate over the medium term as the global shocks subside and the authorities' reforms start to pay off,".
However, according to the survey findings, 68 per cent of CEOs in Tanzania share the pessimism of Global CEOs 73 per cent that the global economy will decline over the next 12 months but are optimistic about the prospects of domestic economic growth.
According to BoT, the domestic economy is performing well with leading economic indicators suggesting a positive outlook.
"...It is likely that growth could be around 5.0 per cent, which is higher than the projected growth of 4.7 per cent for
2022," the central bank said in its latest Monetary Policy Committee, "[and] projects higher growth for in 2023."
The BoT projection centred on the actual growth of 5.2 per cent in the first three quarters of last year, reinforced by the growth of credit to the private sector, improved business and investment conditions, rebounding of tourism activities, as well as prudent monetary and fiscal policies.
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"The growth projections are also supported by ongoing trend of easing global inflationary pressures and improvements in the supply chain," MPC report said.
The country inflation has been on upward trend over recent months, because of the ongoing war in Ukraine, which has caused an increase in import prices of consumer goods.
In January, Tanzania's inflation edged up to 4.9 per cent, compared with 4.8 per cent in the preceding month, but remained within the country's target of 5.4 per cent, and EAC and SADC regional benchmarks of 8.0 per cent and 3-7 per cent, respectively.
The MPC remains "optimistic that inflation will remain within target in the second half of 2022/23, as prices of global consumer goods and inflation in trading partners ease, coupled with the expected increase in the food supply in the country".
IMF said in its latest consultation meeting with Tanzania report that the economy was benefitting from improvements in the business environment, but also expected to continue facing spill overs of the war in Ukraine in the near term.
According to IMF, the country's GDP growth was projected at 5.2 per cent this year and inflation was expected to surpass the BoT's target and reach about 5.3 per cent by the end of the current fiscal year in June.
"Tanzania's economic recovery from the impact of the pandemic is continuing despite headwinds from the global economic environment," IMF said.
