Discussion Paper

No. 2016-47 | November 24, 2016
Global Shocks and their Impact on the Tanzanian Economy


Plummeting commodity prices, China’s economic malaise, and global financial market turbulence have recently wreaked havoc on African economies. This paper investigates whether, and to what extent, these intertwined shocks spillover into the Tanzanian economy. The author finds that a 1 percentage point (ppts) drop in China’s investment growth is associated with a decline in Tanzania’s export growth of roughly 0.60 ppts. A 1 percent fall in commodity prices leads to 0.65 percent lower exports value. The results suggest that a hard landing of the Chinese economy to its ‘new normal’ would doubtless send shock waves through the Tanzanian economy by further driving down commodity demand and prices as well as lowering development finance. In contrast, financial market volatility has a fairly negligible impact on economic growth. The main results stand up well to a wide-array of robustness checks.

Data Set

JEL Classification:

C32, F4, O11


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Cite As

Fiseha Haile (2016). Global Shocks and their Impact on the Tanzanian Economy. Economics Discussion Papers, No 2016-47, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2016-47

Comments and Questions

Anonymous - Referee Report 1
January 09, 2017 - 08:07

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Fiseha Haile - Reply to Referee Report 1
January 24, 2017 - 08:49

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Wing-Keung Wong - A Note on "Global Shocks and their Impact on the Tanzanian Economy"
January 31, 2017 - 08:08

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Fiseha Haile - Reply to Wing-Keung Wong
February 06, 2017 - 08:37

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