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Tanzania Economy Grew 7.1 Pct In 2013, Beating Target -President
A Muslim faithful walks through the "Darajani" market during the holy month of Ramadan at the historic centre of Stone Town on the Indian Ocean island of Zanzibar, July 21, 2012. PHOTO BY REUTERS/Thomas Mukoya
02/01/2014
DAR ES SALAAM (Reuters) - Tanzania's economy grew 7.1 percent in 2013 as output in communications, financial services and manufacturing rose, while inflation almost halved, President Jakaya Kikwete said, forecasting further improvements this year.
Economic growth was higher than 2012's 6.9 percent expansion and surpassed the government's 7 percent target for the year.
"The gross domestic product grew by 7.1 percent compared to 6.9 percent last year. We expect GDP growth to reach 7.3 percent in 2014," Kikwete said in a televised year-end national address late on Tuesday.
"The annual inflation rate fell from 12.1 percent in December 2012 to 6.2 percent in November 2013. Our target is to reach an annual inflation rate of 5 percent in June 2014."
Kikwete said growth in 2013 reflected rising output in several sectors, including communications (up 20.6 percent), financial services (13.2 percent), manufacturing (8.2 percent), mining (7.8 percent), construction (7.8 percent) and transport (7.1 percent).
The country's economy also depends on agriculture and tourism, which vies with mining as the top foreign exchange earner.
Kikwete said completion of a 532-km (330-mile) natural gas pipeline from the south east of the country to the commercial capital Dar es Salaam this year would double the country's current power generation capacity of 1,500 megawatts.
"If the construction of the pipeline is completed as scheduled ... Tanzania will achieve its target of producing 3,000 MW of electricity by 2015," he said.
East Africa's second-largest economy has made big natural gas discoveries off its southern coast and hopes to use its deposits to end chronic energy shortages.
The World Bank said in a report last month Tanzania's economy was likely to grow about 7 percent annually over the next two years, but warned the government against raising its spending based on unpredictable future gas earnings.
The bank said the overall deficit for 2012/13 at 6.2 percent of GDP was higher than the 5.5 percent ceiling the country agreed with the International Monetary Fund.
Kikwete said he has ordered officials to improve the investment climate and expand private sector involvement in major development projects, which could reduce the need for government borrowing to finance infrastructure improvements.
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