Tanzania sees growth slowing to 6.5 pct in 2009

By George Obulutsa

DAR ES SALAAM (Reuters) - Tanzania's economic growth is expected to slow to 6.5 percent this year, from an estimated 7.5 percent in 2008 as the effects of the global economic slump hit home, a government official said on Friday.

The projection is higher than that of the central Bank of Tanzania, which sees growth at between 5 and 6 percent in 2009.

"GDP growth is expected now to decline to 6.5 percent in 2009," Philip Mpango, deputy permanent secretary at the finance ministry, told a gathering of government officials, business executives and donors discussing the effects of the global slowdown.

Like other African economies, Tanzania is expected to be affected by the global downturn on the back of reduced demand and prices for its commodities such as minerals and agricultural exports as well as tourism.

"Growth in agriculture is expected to decline to 3.1 percent in 2009 from 3.6 percent in 2008," Finance Minister Mustafa Mkulo told the meeting. "Similarly, growth in hotel and restaurants is projected to decline from 4.1 percent last year to only 1.4 percent."

The International Monetary Fund expects growth in sub-Saharan Africa to halve this year compared with 2007.

The east African economy of about 40 million has been mentioned as one of the more appealing frontier markets. Contribution from financial services, telecoms and manufacturing sectors has been growing in recent years.

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