Africa-Press – Tanzania. TANZANIA : Tanzania’s current account deficit widened to 4,441 million US dollars in the year ending July from 3,770.7 million US dollars in the corresponding period last year, contributed largely by fast increase in imports than exports.
The Bank of Tanzania (BoT) monthly economic review for August shows that the adverse effects of the global shocks namely the lingering effects of the Covid-19 pandemic, supply- chain disruption caused by the war in Ukraine, climate change effect and monetary policy tightening through interest rate hikes in advanced economies were the major contributors of widening of current account deficit.
However, the central bank report shows forecast on the improvement of current account position owing to the downward trend of commodity prices in the world market observed since December last year, lessening of aggressiveness of monetary policy tightening in advanced economies in the recent months and measures adopted in the country to address the imbalance in the current account.
In addition, seasonal earnings from tourism activities and the export of traditional crops are expected to improve the current account position.
In the period under review, goods and services worth 12,991.9 million US dollars were exported higher than 12,218.2 million US dollars in the corresponding period last year driven by services receipts and non-traditional goods exports, in particular minerals.
Services receipts increased to 5,495.2 million US dollars in the year to July from 4,125 million US dollars in the year ending July 2022, driven by travel (tourism) and transportation receipts.
The increase in travel receipts reflects recovery of the tourism sector, as tourist arrivals rose by 37.2 per cent to 1,658,043 during the year—the highest level ever recorded.
On monthly basis, services receipts were 579.1 million US dollars in July compared with481.9 million US dollars in July last year.
Exports of non-traditional goods recorded a growth of 6.1 per cent, largely on account of minerals, particularly gold, coal, and diamonds, and manufactured goods.
Coal exports increased to 220.7 million US dollars in the year to July from 67.3 million US dollars a year earlier, owing to growing demand in the wake of supply shortages, following the war in Ukraine.
Exports of diamonds almost doubled to 46.8 million US dollars from 29.2 million US dollars in the year ending July 2022 due to price effect. As for gold exports, the rise was largely due to the volume effect.
Manufactured goods exports also recorded notable growth, largely steered by fertilizers, cement, and glassware.
Traditional goods exports also increased to 782.6 million US dollars from 750.6 million US dollars with all traditional goods recording increases except cloves and cashew nuts.
On monthly basis, traditional goods worth 66.5 million US dollars were exported in July compared with 36.2 million US dollars in a similar month in 2022, while non-traditional exports increased to 634.6 million US dollars from 546.6 million US dollars.