Growth data helps with global positioning, not much else

27Jan 2019
Dar es Salaam
Guardian On Sunday
Growth data helps with global positioning, not much else

NEW projections have been published on Tanzania's economic growth prospects, where a leading observation is World Bank projection that the country's economy will be growing at 6.8 per cent in 2019, but the country's economy will remain among the fastest growing African economies in the next few -



This observation is part of the bank's Global Economic Prospects report titled 'Darkening Skies,' an apparent reference to instability in the wake of the US-China trade tiff, confusion over Brexit and other contentions.

This datum was being presented as a projection for overall expectations for 2018 on the one hand, and as trend setter for 2019.

What is also affirmed is that growth stood at 7.1 per cent in 2017 and was likely to come down before going back to around 7.0 in the coming year.

The figures appeared to tamper optimistic Treasury figures of 7.2 per cent growth in 2018 and 7.3 per cent in this unfolding year, a projection that isn't brought out even by the National Bureau of Statistics (NBS).

Its figures are closer to the World Bank than the Treasury, saying growth reached 7.0 per cent in the first half of 2018 from a 6.7 per cent growth rise a year earlier.

It also underlined a historic low in inflation trends owing to virtually stagnating or falling grain prices, the glut in maize as a ringing example.

Usually when people look at such data, and this is a major reason for their being researched and published, is that they tend to provide a reassurance that all will be well.

Yet top economists were in the past week chiding current authorities at the Federal Reserve Board in the United States, the country's central bank, if they can predict the next recession.

The presentation is often complicated but there are hidden negative trends in an economy which require pursuing specific data, and have an eye for correlations between various types of data to know how an economy is performing. Apart from recessions, it helps to augment confidence in an economy.

At the time that the last US recession started late 2007, the US was the world's most performing economy on the basis of doing business indicators and other indices, but stress was building in the profitability of the banking system and more specifically in its housing sector loans.

It is perhaps due to this collective memory of under-performing loans that plenty has been said in that direction for Tanzania but with a diplomatic guise, namely to skip the reason for non-performance.

Experts fall over themselves trying to teach the banks how to loan, excise banks sagging under such loans but skip that fact that changes in public expenditure put banks on receiving end.

The point here is that experts need to study a country's economy to know its weak points where the social fabric may fail to hold and a country descends into disturbances, like the bread riots in Paris, Khartoum and Harare.

Surely those countries don't have identical economies or growth rates, but exploded when oil prices rose lately.



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