Tanzania, Rwanda foresee strong economic growth in 2024
East African economies are optimistic about robust GDP growth in 2024, with Tanzania anticipating a 5.5% expansion compared to the 5% recorded in 2023. However, the country acknowledges potential risks stemming from external geopolitical factors, as highlighted by the finance minister and central bank governor in a letter to the International Monetary Fund.
The letter reportedly outlines concerns about the Tanzanian economy, citing potential negative impacts from heightened geopolitical conflicts, increased volatility in commodity prices, a sudden global slowdown or recession, and climate change-related natural disasters.
Similarly, Rwanda projects a 6.6% growth in its economy for 2024, a slight increase from the 6.2% recorded in the current year, as communicated by the finance minister and central bank governor to the IMF. It is noteworthy that in February, Finance Minister Uzziel Ndagijimana had initially forecasted economic growth of around 7.5% for the East African country in both 2024 and 2025.
Key Takeaways
Geopolitical conflicts, fluctuating commodity prices, a sudden global economic slowdown or recession, and climate-related natural disasters may adversely impact Tanzania's short-term economic prospects. Meanwhile, Rwanda anticipates a temporary slowdown in economic growth, driven by necessary adjustments in fiscal and monetary policies. In the medium term, private consumption and investment are projected to be the primary drivers of growth as fiscal consolidation takes place. The African Development Bank's East Africa Economic Outlook predicts that the region will achieve the highest economic performance on the continent in 2023 and 2024, with growth rates exceeding 5%.
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