Tanzania’s economy is projected to grow by approximately 6% in 2025, up from 5.4% in 2024, according to Finance Minister Mwigulu Nchemba and Central Bank Governor Emmanuel Tutuba. The optimistic forecast, announced during the release of national budget and economic performance updates, reflects the country’s continued resilience and reform agenda in the face of both domestic and global headwinds.
The growth will be largely driven by key economic sectors — agriculture, manufacturing, and tourism — with public investment playing a central role. Reforms aimed at strengthening the business environment, improving infrastructure, and streamlining public services are expected to enhance investor confidence and expand the productive base of the economy. The government’s policy direction aligns closely with its third Five-Year Development Plan (FYDP III), which prioritizes industrialization, export growth, and inclusive economic participation.
In line with this trajectory, the government has lowered its fiscal deficit target to 3.0% of GDP for the upcoming financial year, down from 3.4% in 2024. This signals a commitment to fiscal discipline, enhanced revenue collection, and more efficient public spending. According to the African Development Bank (AfDB), this fiscal shift supports macroeconomic stability, allowing Tanzania to maintain manageable debt levels while still investing in critical sectors such as education, healthcare, and infrastructure.
President Samia Suluhu Hassan, who assumed office in 2021 following the passing of President John Magufuli, is seeking re-election in October 2025. Her administration has prioritized economic diplomacy, digital transformation, and gender-inclusive policies. During her term, the government has significantly increased public investment, launched large-scale projects like the Standard Gauge Railway (SGR) and power generation facilities, and improved access to education and healthcare.
However, despite this progress, several risks remain. Regional insecurity in parts of East Africa, climate change, and commodity price volatility could impact Tanzania’s growth targets. Global economic slowdowns or shifts in monetary policy among developed economies could also affect export demand and capital inflows. The government has acknowledged these threats and emphasized strategic planning and international cooperation to mitigate adverse impacts.
The Central Bank has kept a close eye on inflation, which has remained relatively stable. Continued monetary and fiscal coordination is expected to provide the stability needed for private sector confidence, credit growth, and domestic consumption.
Tanzania has also benefited from continued engagement with international financial institutions. The country’s economic reform agenda has been supported by partners including the International Monetary Fund (IMF) and World Bank, which have praised efforts to improve budget transparency, governance, and infrastructure development. In turn, these relationships are expected to support the country’s fiscal space and development financing needs in the coming years.
As the election approaches, observers will watch closely to see how Tanzania balances political priorities with its economic reform agenda. President Samia’s focus on “economic diplomacy and structural transformation” has made her administration one of the most business-focused in Tanzania’s recent history.
In summary, Tanzania’s economic outlook for 2025 is positive, anchored in structural reforms, robust investment strategies, and a clear political commitment to sustainable growth. With elections looming, how the government manages public expectations while maintaining macroeconomic discipline will be a key test for the country’s economic leadership.
