Imports decline, narrow current account deficit
TANZANIA: IMPORTS of goods and services have seen a decrease up to May this year, contributing to a narrowing of the current account deficit, according to the latest monthly economic review by the Bank of Tanzania (BoT).
The BoT reported that imports of goods and services fell to 16.108 billion US dollars in the period to May this year from 17 billion US dollars compared to the same period last year.
This decline in imports has significantly contributed to reducing the current account deficit to 2.499 billion US dollars, down from 5.222 billion US dollars in May last year.
The review highlighted that exports of goods and services increased, driven by higher net inflows in the services sector amidst favorable global commodity prices.
The decrease in imports was primarily attributed to reduced purchases of refined white petroleum products, fertilizers, pharmaceuticals, soaps, detergents, and food and beverages for household consumption.
The decline in oil imports was particularly influenced by the drop in global crude oil prices.
In terms of services payments, expenditures amounted to 2.268 billion US dollars in the year ending May, compared to 2.564 billion US dollars in the previous year.
This decline was largely due to lower freight costs, which aligned with the overall reduction in the import bill.
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The primary income account showed a deficit of 1.574 billion US dollars for the year ending May, compared to 1.383 billion US dollars in the previous year.
This increase in deficit was mainly attributed to higher interest payments on external debt, driven by rising global interest rates.
On a monthly basis, the deficit widened to 183.1 million US dollars from 105.4 million US dollars in May last year.
Conversely, the secondary income account recorded a surplus of 640.5 million US dollars for the year ending May, up from 610.4 million US dollars in the previous year.
This surplus growth was primarily due to increased personal transfers. On a monthly basis, the surplus narrowed slightly to 38.8 million US dollars from 52.6 million US dollars in May last year.
