Tanzania’s economy is forecast to grow even faster this year than in 2023, Kitila Mkumbo, minister of state in the president’s Office for Planning and Investment, said on Thursday.

Mkumbo told parliament that the economy was projected to grow 5.4% this year from 5.1% in 2023, which was faster than the 4.7% a year earlier.

Tanzania’s economy largely relies on tourism, mining, agriculture and manufacturing.

Mkumbo said the government expected the budget deficit in the coming fiscal year to not exceed 3% of gross domestic product.

Finance Minister Mwigulu Nchemba is due to present the 2024/25 (July-June) budget to parliament later on Thursday.

The World Bank said in March that Tanzania had sustained its economic growth despitethe increasing impact of climate change.

The bank said growth was due to stronger business confidence and improved trade balances which boosted aggregate demand, balancing the damaging impact of droughts and floods on household income.

In the last three years, President Samia Suluhu Hassan’s administration has undertaken various economic reforms with ambitions to return the country’s economic growth to the pre-pandemic real GDP growth rates of 6-7%.

Tanzania’s central bank raised its key interest rate to 6% in April for the quarter ending June 2024 from 5.5% in January to keep a lid on lingering inflationary pressure.