Bank of Tanzania head Florens Luoga said the estimate was based on "the increase in use of resources and improved efficiency in production activities".
He said Tanzania was among few countries that escaped recession in 2020 due to the impact of COVID-19 and the central bank expects the economy will grow at 5% in 2021 from 4.8% recorded in 2020.
They were pleased to see the impact of COVID-19 on economic activities is declining, giving more hope for economic recovery, he said.
"This situation is enhanced by the increased vaccination campaign and other efforts to improve the economy by the government, private sector, and development partners," he said in the administrative capital Dodoma.
The bank expects the economy to grow at 5.2% in 2022.
President Samia Suluhu said the government had taken several measures including talking with international financial institutions to seek debt forgiveness or prolong the loan repayment period so that they can pay slowly.
(Reporting by Nuzulack Dausen; Editing by George Obulutsa and Angus MacSwan)