Since 1995, Tanzania has made major progress in economic reform and macroeconomic
stabilization, resulting in strong growth and low inflation. This paper reviews Tanzania’s
growth performance and prospects and assesses the impact of growth on poverty. It finds that
growth has been increasingly driven by higher factor productivity and that a continuation of
recent policies should allow Tanzania to grow above 5 percent a year over the medium term.
Furthermore, it finds that growth since 1995 has resulted in a significant decline of poverty
and that prospects are favorable for Tanzania to attain its objectives for reducing income
poverty by 2015.