Tanzania's economy remains robust and is projected to grow by seven per cent annually for the next two years driven by capital intensive sectors, the World Bank said Friday. In its biannual Tanzania Economic Update, the World Bank said that the economy is expected to continue on its current growth flight in the short and mid-term future, with most growth centred in communication, transport, construction and retail trade sectors. The country's economy has performed well in the past two years with quick and stable economic growth of nearly seven per cent and substantial drops in the rate of inflation. "The main drivers of Tanzania's rapid economic growth continue to be a small number of fast growing capital intensive sectors, particularly communications, financial services, construction, manufacturing and retail trade sectors," the bank said in the report. According to the World Bank , falling food prices and tight money policies have cushioned Tanzania against external financial shocks and high commodity prices – paving the way for sustained growth in the country. With regard to inflation, the report says it has continued to decline over the past 18 months, declining to 6.3 per cent in October this year from 20 per cent at the end of 2011. The steady and substantial decline in headline inflation has been the result of a combination of the implementation of a stricter monetary policy and a decline in food and energy prices. READ: Tanzania's economy expands by 6.7pc in Q2 Despite relatively high growth rates, the report said that about 12 million Tanzanians are still plagued by poverty – with at least 4.2 million people living in extreme poverty. "The concentration of economic growth in urban areas and in capital-intensive sectors, such as the mining, communication, construction, and banking sectors, explains the prevalence of poverty," the report said adding that 80 per cent of the country's poor reside in rural areas. "Growth in agricultural value added activities has not been suf?ciently high to facilitate a signi?cant reduction in poverty in rural areas...with most rural residents dependent on this sector for their livelihoods," the report added. The World Bank urged Tanzania to improve the living conditions of its extremely poor households by employing several measures, including a well-targeted cash transfer program with an expenditure of about $250 million a year. Cash transfer programs are based on the payment of direct, regular and predictable cash bene?ts to extremely poor and vulnerable households. These programs, the bank said, will facilitate increases in the poor households' consumption basket and enable them to invest in human and physical capital. firstname.lastname@example.org
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