The 2011 Public Expenditure Review (PER)is divided into two parts. The first describes recentdevelopments in fiscal policy, with a particular focus onthe adjustment announced in November 2011 as well as shortand long term prospects. The second part assesses governmentperformance in the health sector, which accounts for about10 percent of the total budget. The objectives of the budgetanalysis chapter are to: 1) document fiscal and macrodevelopments since November 2011, after the government madeadjustments to the budget under the International MonetaryFund (IMF) Policy Support Instrument (PSI). Governmentreduced the fiscal deficit in the budget to approximately6.6 percent of Gross Domestic Product (GDP) fromapproximately 8.0 percent of GDP in the initially approvedbudget for 2011/12. 2) Take stock of budget execution in2010/11 and strategic budget allocation in 2011/12 inrelation to Government strategic objectives of economicgrowth and poverty reduction as envisaged in MKUKUTA (Mpangowa Kukuza Uchumi na Kupunguza UmaskiniTanzania-Tanzania's National Strategy for Growth andReduction of Poverty) and Five Year Development Plan (FYDP).3) Highlight a number of priorities that Government needs totake into account in formulating its fiscal policy both inthe short and longer terms. In 2011, the recurring domesticenergy crisis negatively affected the level of privatesector activities. The Bank of Tanzania's tightermonetary policy is aimed at reducing the inflation rate,which reached 16.8 percent and 19.8 percent in September andDecember 2011, respectively.
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