The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania

Gibson Sabayo; John Massito; Abogust Moshi

doi:doi:10.11648/j.eco.20231202.11

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The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania

Gibson Sabayo, John Massito, Abogust Moshi

Published in Economics (Volume 12, Issue 2)

Received: 7 February 2023 Accepted: 24 March 2023 Published: 27 April 2023

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Abstract

The government of Tanzania has persistently experienced uneven growth rate of Gross Domestic Product (GDP) and failed to attain the national target. This research study intended to examine the impact of oil price volatility on inflation and economic growth in Tanzania. Specifically, the analysed the causal relationship between Oil Price Volatility, inflation and economic growth in Tanzania. The study employed secondary data and the modelling of time series data was done by using Auto regressive distributed lag model (ARDL). The analysis showed the following results, after controlling the effect of export and import, the oil price volatility has negative impact on economic growth and after controlling the effect of exchange rate and Interest rate on the inflation rate it showed that the oil price volatility has positive impact on inflation in long run. whenever the oil price volatility increases by one percent the inflation rate increases by the rate of 1.340 percentage. Furthermore, the analysis result showed that there was no causality between the oil price volatility and economic growth (GDP); there was a two-way direction of causality between economic growth (GDP) and inflation rate and also, the result showed there was a one-way direction of the causality from the oil price volatility on inflation that means that oil price volatility enhanced the inflation rate. The study recommendation or advice was the Government through the regulatory authority to manage the oil price volatility, exchange rate, export and import in order to curb effects on inflation and economic growth (GDP).

Published in	Economics (Volume 12, Issue 2)
DOI	10.11648/j.eco.20231202.11
Page(s)	32-43
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2023. Published by Science Publishing Group

Keywords

Oil Price Volatility, Inflation, Economic Growth

References

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APA Style

Gibson Sabayo, John Massito, Abogust Moshi. (2023). The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania. Economics, 12(2), 32-43. https://doi.org/10.11648/j.eco.20231202.11

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ACS Style

Gibson Sabayo; John Massito; Abogust Moshi. The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania. Economics. 2023, 12(2), 32-43. doi: 10.11648/j.eco.20231202.11

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AMA Style

Gibson Sabayo, John Massito, Abogust Moshi. The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania. Economics. 2023;12(2):32-43. doi: 10.11648/j.eco.20231202.11

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@article{10.11648/j.eco.20231202.11,
  author = {Gibson Sabayo and John Massito and Abogust Moshi},
  title = {The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania},
  journal = {Economics},
  volume = {12},
  number = {2},
  pages = {32-43},
  doi = {10.11648/j.eco.20231202.11},
  url = {https://doi.org/10.11648/j.eco.20231202.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20231202.11},
  abstract = {The government of Tanzania has persistently experienced uneven growth rate of Gross Domestic Product (GDP) and failed to attain the national target. This research study intended to examine the impact of oil price volatility on inflation and economic growth in Tanzania. Specifically, the analysed the causal relationship between Oil Price Volatility, inflation and economic growth in Tanzania. The study employed secondary data and the modelling of time series data was done by using Auto regressive distributed lag model (ARDL). The analysis showed the following results, after controlling the effect of export and import, the oil price volatility has negative impact on economic growth and after controlling the effect of exchange rate and Interest rate on the inflation rate it showed that the oil price volatility has positive impact on inflation in long run. whenever the oil price volatility increases by one percent the inflation rate increases by the rate of 1.340 percentage. Furthermore, the analysis result showed that there was no causality between the oil price volatility and economic growth (GDP); there was a two-way direction of causality between economic growth (GDP) and inflation rate and also, the result showed there was a one-way direction of the causality from the oil price volatility on inflation that means that oil price volatility enhanced the inflation rate. The study recommendation or advice was the Government through the regulatory authority to manage the oil price volatility, exchange rate, export and import in order to curb effects on inflation and economic growth (GDP).},
 year = {2023}
}

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TY  - JOUR
T1  - The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania
AU  - Gibson Sabayo
AU  - John Massito
AU  - Abogust Moshi
Y1  - 2023/04/27
PY  - 2023
N1  - https://doi.org/10.11648/j.eco.20231202.11
DO  - 10.11648/j.eco.20231202.11
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 32
EP  - 43
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20231202.11
AB  - The government of Tanzania has persistently experienced uneven growth rate of Gross Domestic Product (GDP) and failed to attain the national target. This research study intended to examine the impact of oil price volatility on inflation and economic growth in Tanzania. Specifically, the analysed the causal relationship between Oil Price Volatility, inflation and economic growth in Tanzania. The study employed secondary data and the modelling of time series data was done by using Auto regressive distributed lag model (ARDL). The analysis showed the following results, after controlling the effect of export and import, the oil price volatility has negative impact on economic growth and after controlling the effect of exchange rate and Interest rate on the inflation rate it showed that the oil price volatility has positive impact on inflation in long run. whenever the oil price volatility increases by one percent the inflation rate increases by the rate of 1.340 percentage. Furthermore, the analysis result showed that there was no causality between the oil price volatility and economic growth (GDP); there was a two-way direction of causality between economic growth (GDP) and inflation rate and also, the result showed there was a one-way direction of the causality from the oil price volatility on inflation that means that oil price volatility enhanced the inflation rate. The study recommendation or advice was the Government through the regulatory authority to manage the oil price volatility, exchange rate, export and import in order to curb effects on inflation and economic growth (GDP).
VL  - 12
IS  - 2
ER  -

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Author Information

Gibson Sabayo

College of Business and Economics, University of Dodoma, Dodoma, Tanzania
John Massito

College of Business and Economics, University of Dodoma, Dodoma, Tanzania
Abogust Moshi

College of Business and Economics, University of Dodoma, Dodoma, Tanzania

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APA Style

Gibson Sabayo, John Massito, Abogust Moshi. (2023). The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania. Economics, 12(2), 32-43. https://doi.org/10.11648/j.eco.20231202.11

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ACS Style

Gibson Sabayo; John Massito; Abogust Moshi. The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania. Economics. 2023, 12(2), 32-43. doi: 10.11648/j.eco.20231202.11

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AMA Style

Gibson Sabayo, John Massito, Abogust Moshi. The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania. Economics. 2023;12(2):32-43. doi: 10.11648/j.eco.20231202.11

Copy | Download

@article{10.11648/j.eco.20231202.11,
  author = {Gibson Sabayo and John Massito and Abogust Moshi},
  title = {The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania},
  journal = {Economics},
  volume = {12},
  number = {2},
  pages = {32-43},
  doi = {10.11648/j.eco.20231202.11},
  url = {https://doi.org/10.11648/j.eco.20231202.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20231202.11},
  abstract = {The government of Tanzania has persistently experienced uneven growth rate of Gross Domestic Product (GDP) and failed to attain the national target. This research study intended to examine the impact of oil price volatility on inflation and economic growth in Tanzania. Specifically, the analysed the causal relationship between Oil Price Volatility, inflation and economic growth in Tanzania. The study employed secondary data and the modelling of time series data was done by using Auto regressive distributed lag model (ARDL). The analysis showed the following results, after controlling the effect of export and import, the oil price volatility has negative impact on economic growth and after controlling the effect of exchange rate and Interest rate on the inflation rate it showed that the oil price volatility has positive impact on inflation in long run. whenever the oil price volatility increases by one percent the inflation rate increases by the rate of 1.340 percentage. Furthermore, the analysis result showed that there was no causality between the oil price volatility and economic growth (GDP); there was a two-way direction of causality between economic growth (GDP) and inflation rate and also, the result showed there was a one-way direction of the causality from the oil price volatility on inflation that means that oil price volatility enhanced the inflation rate. The study recommendation or advice was the Government through the regulatory authority to manage the oil price volatility, exchange rate, export and import in order to curb effects on inflation and economic growth (GDP).},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Oil Price Volatility on Inflation and Economic Growth in Tanzania
AU  - Gibson Sabayo
AU  - John Massito
AU  - Abogust Moshi
Y1  - 2023/04/27
PY  - 2023
N1  - https://doi.org/10.11648/j.eco.20231202.11
DO  - 10.11648/j.eco.20231202.11
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 32
EP  - 43
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20231202.11
AB  - The government of Tanzania has persistently experienced uneven growth rate of Gross Domestic Product (GDP) and failed to attain the national target. This research study intended to examine the impact of oil price volatility on inflation and economic growth in Tanzania. Specifically, the analysed the causal relationship between Oil Price Volatility, inflation and economic growth in Tanzania. The study employed secondary data and the modelling of time series data was done by using Auto regressive distributed lag model (ARDL). The analysis showed the following results, after controlling the effect of export and import, the oil price volatility has negative impact on economic growth and after controlling the effect of exchange rate and Interest rate on the inflation rate it showed that the oil price volatility has positive impact on inflation in long run. whenever the oil price volatility increases by one percent the inflation rate increases by the rate of 1.340 percentage. Furthermore, the analysis result showed that there was no causality between the oil price volatility and economic growth (GDP); there was a two-way direction of causality between economic growth (GDP) and inflation rate and also, the result showed there was a one-way direction of the causality from the oil price volatility on inflation that means that oil price volatility enhanced the inflation rate. The study recommendation or advice was the Government through the regulatory authority to manage the oil price volatility, exchange rate, export and import in order to curb effects on inflation and economic growth (GDP).
VL  - 12
IS  - 2
ER  -

Copy | Download