By Business Insider Reporter
Tanzania enters 2026 on a firm macroeconomic footing, supported by low and stable inflation, robust domestic growth, a resilient banking sector, and improving external balances, according to the Bank of Tanzania’s January 2026 Monetary Policy Report.
Released early this week, the report shows that prudent monetary policy, favourable global conditions, and broad-based domestic economic activity have created a stable environment that positions the country for continued strong growth in 2026, while safeguarding price stability.
Simply put, the Central Bank (BoT) is saying that the national economy is doing well and is expected to keep doing well in 2026, without prices rising too fast. That means Tanzania is growing at a healthy pace, prices are stable, banks are strong, and the outlook for 2026 is positive.
“Mainland Tanzania economic growth has been robust, and it is estimated to grow at around 5.9 percent in 2025, in line with the projection of 6 percent,” reads the new report. “This was driven mainly by agriculture, mining, and construction.”
BoT estimates Zanzibar economy to have grown by 6.8 percent, driven by construction, tourism, and manufacturing activities. Credit to the private sector expanded robustly by 20.3 percent.
“Growth in Mainland Tanzania is projected to remain strong at 6 percent in the first quarter of 2026, and the Zanzibar economy at 7.2 percent,” it adds.
In her year-end address on the 2025 economic performance, President Dr. Samia Suluhu Hassan highlighted that real GDP grew by 5.8 percent in 2025, an improvement over 2024, driven by strong contributions from mining, agriculture, construction, services, and tourism sectors.
She also noted that inflation remained manageable at around 3.4 percent, foreign exchange reserves reached about US$6.6 billion, and public debt remained sustainable – all signs of macroeconomic stability.
“Our economy has continued to grow despite challenges, thanks to deliberate investments in strategic infrastructure and sectoral performance,” the Head of State said, emphasising that continued private investment, robust domestic production, and political stability will be critical for sustaining momentum into 2026.
Tanzania: Real GDP Growth at a Glance (%)
| Institution | 2024 | 2025 (Proj.) | 2026 (Proj.) |
| Bank of Tanzania (BoT) | 5.5 | ~6.0 | — |
| World Bank | 5.5 | 6.0 | 6.2 |
| IMF | 5.5 | ~6.0 | ~6.5 |
| AfDB | 5.7 | ~6.0 | — |
| Fitch Ratings | 5.5 | 5.9 | — |
| FocusEconomics (Consensus) | — | ~5.9 | ~6.0 |
President Samia’s projections are supported by other data showing strong gains in exports, including gold and traditional commodities, and expanding tourism receipts, which together bolstered external sector performance through 2025.
To support the projected growth, BoT’s Monetary Policy Committee (MPC) has maintained the Central Bank Rate (CBR) at 5.75 percent for the first quarter of 2026, citing confidence that inflation will remain within the medium-term target range of 3–5 percent.
The central bank noted that keeping the policy rate unchanged provides adequate support for private-sector activity and investment while ensuring inflationary pressures remain contained.
Inflation remained low and stable throughout 2025, averaging 3.5 percent in Mainland Tanzania and 3.4 percent in Zanzibar during the fourth quarter, well within the BoT’s target range
The report attributes this performance to prudent monetary policy, a stable exchange rate, moderate domestic food prices, and declining global oil prices. Looking ahead, inflation is expected to remain subdued in 2026, supported by adequate national food stocks, stable energy prices, and easing imported inflation pressures.
The new Monetary Policy Report highlights lower global oil prices, projected at US$ 62–68 per barrel, as a key factor easing inflation and foreign-exchange pressures, given that oil accounts for about 17 percent of Tanzania’s goods imports. Meanwhile, record-high gold prices are expected to continue boosting export earnings and foreign-exchange reserve.
Un its latest Global Economic Prospects report, the World Bank says that Tanzania will be one of the top three fastest-growing economies in the East African Community (EAC) in 2026, alongside Rwanda and Uganda.
The global lender forecasts Rwanda to lead the EAC in 2026 with 7.2 percent GDP growth, followed by Uganda at about 6.4 percent, while Tanzania is projected to expand by slightly below that at 6.2 percent.
The International Monetry Fund (IMF) pegs Tanzania’s 2026 GDP growth at 6.5 percent.
The national economy has posted robust growth in recent years, driven by strong performance across services, industry, agriculture, mining, and infrastructure sectors.
In 2024, the country recorded a 5.5 percent real GDP growth, underpinned by energy projects like the Julius Nyerere Hydropower Plant and increased investments in transport and social infrastructure.
Globally, the IMF projects world economic growth of 3.2 percent in 2025, with a similar pace expected in 2026, despite ongoing geopolitical and trade uncertainties Importantly for Tanzania, global inflation has eased significantly, allowing major central banks to adopt more accommodative policy stances.
