The Tanzanian economy is showing strong growth as a result of continuing improvement in agricultural production and strengthening macroeconomic fundamentals. In 2001, real GDP growth continued the recent upward trend reaching 5.6 per cent from a yearly average of 4.5 per cent since 1995. The outlook on growth is stabilisation, with real GDP growth estimated at 5.7 per cent in 2002, and projected to moderate to 5.9 per cent in 2003. The improving growth performance since 1995 has been accompanied by fiscal orientation that has enabled increased budgetary allocation towards priority sectors for poverty alleviation, in accordance with Poverty Reduction Strategy Papers (PRSP) targets. Prudence in monetary management has brought monetary expansion under control and has contributed to a downward trend in inflation, which is expected to be maintained in 2002 and 2003. The external position of Tanzania was precarious in 2001 as a result of poor export performance, which emanated from low commodity prices. The difficult external situation is expected to continue in 2002 and 2003…