Tanzania is expected to increase its rate of economic growth this year from last year's 7,3% and to get inflation below the average 2007 level of 7% by mid-2009, the finance minister said on Thursday.
In an economic survey presented to Parliament ahead of his 2008/09 fiscal budget speech, Mustafa Mkulo predicted the rate of growth would rise steadily in each year up to 2011.
"The economy will grow by 7,8% in 2008, 8,1% in 2009, 8,8% in 2010 and 9,2% in 2011," he said in the survey.
Mkulo said the East African country's GDP grew 7,1% in 2007, compared with 6,7% in 2006, led by telecommunications, financial services and construction.
"Inflation will be kept below 7% by the end of June 2009," he said. Average inflation in 2007 was 7%.
Mkulo's forecast comes at a time when high food and oil prices are eating into economies worldwide, and this could be a challenge to growth as it fuels high inflation.
"We expect inflation to stay above 5% largely due to high global oil prices," he said.
The government had targeted average inflation at below 4,5% by the end of the current fiscal year. It will be at 7% in 2008/09, Mkulo said, adding that average inflation stood at 7% in 2007, compared with 7,3% in 2006.
Annual inflation stood at 9,7% in April, up slightly from 9% in March and 6,1% last April, according to figures from the National Bureau of Statistics.