Tanzania's economy is expected to grow by 7.2 per cent in 2011 from an estimated 7.0 per cent this year due to a strong recovery after the global financial crisis, the country's president said on Friday.
The government's projections for the economy of east Africa's second biggest economy beat the International Monetary Fund's outlook for economic growth of 6.7 per cent in 2011.
Tanzania, Africa's fourth biggest gold producer, mainly depends on tourism, mining and agriculture and is increasingly attracting more investor interest in telecommunications, energy, manufacturing, financial services and transport.
"We expect that the economy will grow by 7 per cent this year, compared with 6 per cent in 2009," President Jakaya Kikwete said in a year-end national address televised late on Friday.
"Our expectations are that the economy will grow by 7.2 per cent during 2011 if everything goes to plan."
A Reuters poll of nine economists showed in August Tanzania's economy should grow 6.3 per cent this year and 6.8 per cent in 2011, thanks to robust activity in all sectors, while inflation will stay in single digits through to 2011.
A previous poll in March had projected economic growth of a median of 5.1 per cent in 2010.
Kikwete said the inflation rate had declined from an average of 12.1 per cent in 2009 to 5.5 per cent in November 2010.
"Our intentions and expectations are that the inflation rate will continue to decline. Therefore, it is imperative that we should ensure the food availability situation in the country remains satisfactory," he said.
The price of food, which carries the biggest weight in the basket of goods and services used to measure inflation, is a sensitive issue in Tanzania where the majority of the people live in poverty.
Good rains have helped keep inflation in in check but rising fuel prices threaten to exert upward pressure on prices.
Kikwete said Tanzania could face food shortages in 2011 because many parts of the country experienced lower-than-expected rainfall.
He said the government plans to raise its strategic grain reserve to 400,000 tonnes by 2015.
"We have bought 200,000 tonnes of food for the strategic grain reserve this year," he said.
He said the government would make subsidised fertiliser available to more farmers to boost food output.