Washington, United States: The International Monetary Fund (IMF) said on Tuesday that it had reached a staff-level agreement with the government of Tanzania to unlock $375.5 million in financing, with the east African country feeling the fallout from the war on Iran.
In a statement, the IMF said the broad objectives of its program in the east African country had been met.
"Growth remains strong, inflation is low and stable, international reserves coverage is adequate, public spending on education and health has ticked up, and climate resilience has strengthened," the statement said.
Tanzania has been hit by the economic fallout of the US-Israel war on Iran, including by spiking fuel prices and fertilizer supply shortages.
The IMF's Nicolas Blancher, who led the multilateral lender's negotiating team, lauded the Tanzanian government for allowing fuel prices increases to pass through to domestic prices and for letting the exchange rate remain flexible.
The IMF expects GDP growth in 2026 to remain at 5.9 percent, with inflation rising to 4.7 percent, the statement said, attributing the pared growth projection to the war in the Middle East.
"Higher oil and fertilizer prices and disruptions to global aviation and value chains will weigh on activity in the agriculture, tourism, and transportation sectors, and contribute to inflation and external pressures," the statement said.
The disbursement of the latest IMF tranche will be subject to the lender's board's approval. It would bring total disbursements by the IMF under the latest program to more than $1.6 billion.
