Tanzania’s central bank announced on October 2, 2025, that it will maintain its benchmark interest rate at 5.75%. The decision comes just months after a 25-basis-point cut in July, showing policymakers’ confidence in the country’s economic direction.
Inflation Remains Under Control
Governor Emmanuel Tutuba said inflation remains within the official 3%–5% target range. In August, consumer prices rose slightly to 3.4%, up from 3.3% in July, but overall inflation has stayed near 3% for nearly two years. Because of this stability, officials believe the economy can continue growing without immediate monetary adjustments.
Strong Growth Momentum
The economy expanded 5.4% in the first quarter of 2025, compared to 5.2% a year earlier. Tutuba predicted growth above 6% in both the second and third quarters, with similar results expected for Q4. He credited stronger exports and rising investment from both the government and private sector as key growth drivers.
Infrastructure Development
President Samia Suluhu Hassan’s administration is accelerating major projects, including a large hydroelectric dam and a national railway network. With the October 29 elections approaching, these initiatives are boosting job creation and adding momentum to the country’s growth outlook.
Why It Matters
Keeping interest rates steady while expanding infrastructure signals Tanzania’s economic resilience. The approach is designed to protect price stability while encouraging investment, helping the country strengthen its position as a leading economy in East Africa.
Outlook
For the rest of October 2025, the central bank will continue to track inflation and growth indicators. At the same time, ongoing infrastructure work and the upcoming elections will play a central role in shaping Tanzania’s financial future.
__________________________________________________
