Tanzania's economy has been showing steady growth in recent years. At the same time, GDP per capita by PPP ($3,393.8) remains below the regional average. The structure of the Tanzanian economy is dominated by the service sector, which accounts for more than 30% of GDP, but agriculture, which accounts for 24.3% of GDP and over 64% of the employed population, continues to play a key role in the economy. Moreover, a significant part of the country's residents are still engaged in subsistence agriculture.
The growth of the Tanzanian economy at the level of 7% in 2018-2019 slowed down in 2020 under the influence of the COVID-19 pandemic. Economic recovery in the post-pandemic period was complicated by unstable global market conditions and slowing growth in major economies. After a slight increase in the pace of development in 2021, real GDP growth slowed to 4.7% in 2022.
According to forecasts by Oxford Economics and the IMF, the growth of the Tanzanian economy in 2023 will be 5.2–5.4%. In the medium term, the country's economic development is also expected to accelerate, which should be facilitated by the successful implementation of major infrastructure projects, support from the IMF, as well as an adaptive monetary policy. A crucial role for maintaining macroeconomic stability will be played by the National Five–year Development Plan for 2021/22-2025/26 and the project under development for the extraction and liquefaction of natural gas on the shelf of Tanzania worth 42 billion US dollars.
It is planned that the successful implementation of the LNG production project will contribute to the diversification of the economy. According to forecasts, real GDP growth may recover to 7% in the medium term. The project is expected to have a positive impact on economic activity by increasing the added value of gas production, stimulating related economic activities, strengthening energy infrastructure and reinvesting government revenues in human capital. On the other hand, with inefficient government management of revenues from gas production and export, there is a possibility of a "Dutch disease" in Tanzania — an excessive strengthening of the national currency, which reduces the competitiveness of products from other sectors of the country's economy.
