High import bills push Tanzania’s current account deficit to $4.86 billion in June 2023

Tanzania’s current account recorded a deficit of $4.86 billion in June 2023, compared with $3.398 billion recorded during the same period in June 2022 driven by high import bills according to the Bank of Tanzania (BoT) Monthly Economic Review for June, 2023.

According to the Central Bank, the current account balance will improve in the subsequent months due to declining pressure from commodity prices along with the increase in receipts from tourism-related activities.

“The cumulative effects of the shocks, particularly the war in Ukraine and monetary policy tightening in advanced economies, continued to depress the external sector of the economy,” the Central Bank report shows.

Tanzania’s balance of payments improved to a surplus of $114 million, from a deficit of $1.1 million in the year to June 2022.

The stock of foreign reserves increased to $5.28 Billion at the end of June 2023, from $5.11 billion in the similar period in 2022.

“The reserves remain adequate, covering 4.8 months of projected imports of goods and services, above the country benchmark of at least 4 months and the EAC benchmark of at least4.5 but lower than that of SADC of at least 6 months,” the BoT report shows.