Tanzania Economic Update, June 2020 : Addressing the Impact of COVID-19
State of the economy: In 2019 growth in Tanzania’s economy was again solid, but this year COVID-19is expected to cut GDP growth at least in half and increase poverty. Growth slowdown in Tanzania’smain trade partners has reduced demand and prices fo...
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| Format: | Economic & Sector Work |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/850721591546081246/Tanzania-Economic-Update-Addressing-the-Impact-of-COVID-19 http://hdl.handle.net/10986/33878 |
| Summary: | State of the economy: In 2019 growth in
Tanzania’s economy was again solid, but this year COVID-19is
expected to cut GDP growth at least in half and increase
poverty. Growth slowdown in Tanzania’smain trade partners
has reduced demand and prices for its agricultural
commodities and final manufactured goods, and international
travel bans and fear of contracting the virus are expected
to inhibit the recovery of tourism, which has been one of
the fastest-growing sectors in the economy. Domestic
business conditions are expected to deteriorate. The current
outlook is highly uncertain,and risks are tilted to the
downside especially if global demand remains suppressed or
government actions are not strong, well-targeted or
sustained. The risks for a more negative growthoutlook than
the baseline described above are high. Under a severe local
outbreak, Tanzania’s health care system would become heavily
strained, and self-imposed social distancing could
dampenmuch of the economy. This would likely lead to a
delayed economic recovery, and Tanzania would face continued
pressures to finance additional health spending to save
lives and providesupport to protect livelihoods. Even if the
outbreak is contained in Tanzania, a protracted/resurging
global health crisis that continues in 2021 could undermine
global demand, and thus, the Tanzanian economy. Furthermore,
even if the global health crisis is contained and Tanzania’s
COVID-19 reported cases also decrease, additional trade and
logistics restrictionscould continue disrupting global trade
during the recovery. Tanzania’s macroeconomic performance
has been strong for the last decade, but the current crisis
is an unprecedented shock that requires strong,
well-targeted and sustained policy response. |
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