The July 2020 Survey requested bank and nonbank private sector firm respondents to indicate how optimistic/ pessimistic they were regarding the country’s economic prospects in the next 12 months.
The results showed improved optimism by respondents across banks and nonbank private sector firms largely as a result of the lifting of restrictions initially put in place to contain the spread of the pandemic (Charts 8 and 9).
Bank respondents revised their optimism upwards largely due to the reopening of the economy, in addition to the fiscal stimulus and monetary policy measures put in place, soundness and stability of the banking system, other targeted state interventions to cushion the economy from shocks and effects of the pandemic including funds for Kazi Mtaani Program and other initiatives to support women and people living with disabilities.
However, the limited activity in the education sector, concerns over debt obligations, and reduced development spending were cited as risks to this optimism.
Similarly, the non-bank private sector firms revised their optimism upwards largely due to the opening up of the economy through lifting of COVID-19 containment restrictions.
Respondents expected economic activity to pick up gradually citing positivity in efforts to develop a vaccine globally, and curbing the spread locally, Government stimulus package, payment of pending bills, increased demand and tax measures put in place to cushion businesses.
However, the optimism was tempered by the uncertainties with regard to the impact of COVID-19 on businesses, rising cases of the pandemic, and reduced development expenditure.