Tanzania Economic Outlook Q1 2026
Comprehensive quarterly analysis of Tanzania's macroeconomic performance, fiscal policy, and sector-by-sector growth drivers.
Grace Kimaro
Economics Correspondent
Dr. Honest Ngowi
Contributing Analyst
Table of Contents
Executive Summary
Tanzania enters 2026 with solid macroeconomic fundamentals and improving growth momentum. GDP growth is projected at 5.6% for the year, supported by infrastructure investment, tourism recovery, and strong agricultural exports.
Key findings: • Inflation remains contained at 4.2%, within the BoT's 3-5% target range • The fiscal deficit has narrowed to 3.2% of GDP • Foreign reserves provide 5.2 months of import cover • The shilling has depreciated only 3% against USD over the past year
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GDP Growth & Drivers
Tanzania's economy demonstrated resilience in 2025, with GDP growth reaching an estimated 5.4% — the strongest performance since 2019. This momentum is expected to continue into 2026, with our baseline forecast of 5.6% growth.
The composition of growth has shifted meaningfully over the past two years. While services remain the largest sector, industry and particularly construction have gained share...
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