• Paschal David Maingu

This study tests a triplet deficit hypothesis in Tanzania, which examine how the three variables move together namely: budget account (BA), current account deficit (CAD) and financial account (FA). This study used deductive approach. The current investigation employed secondary data extracted from Bank of Tanzania (BoT) for the period of 48 years (1976-2024). In data analysis, first both Augmented Dickey Fuller test and Phillip Perron test used in test of unit roots. Also, Autoregressive Distributed Lag (ARDL) applied to determine the long-run relationship while Granger causality employed to determine direction of causality. Result show that, variables of financial account, current and budget deficits are correlated in the long run. Finding of ECM model estimation indicates presence of the short run relationship between FA, CAD and BD. For long-run only current account deficits and budget account deficit are co-integrated. Granger causality test reveals the causality runs from the FA to the CAD and FA deficits, thus, we conclude that the triple deficits hypothesis holds in Tanzania. Conclusively, ARDL technique confirmed long-run association among the triple deficits. Granger support the twin deficits hypothesis running from budget deficit to current account deficit, also BD does not granger cause FA. Since evidence supports the presence of the triple deficit hypothesis, efforts to reduce the budget deficit should be prioritized, as it has long-term implications for the external balances. Fiscal discipline, efficient public expenditure management, and improved revenue mobilization are essential to reduce the pressure on both the current and financial accounts.

Budget Account, Current Account Deficit, Financial Account, Triplet Deficit Hypothesis

"Triplet Deficits Hypothesis; Empirical Evidence from Tanzania ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.12, Issue 7, page no.d177-d192, July-2025, Available :http://www.jetir.org/papers/JETIR2507321.pdf

"Triplet Deficits Hypothesis; Empirical Evidence from Tanzania ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.12, Issue 7, page no. ppd177-d192, July-2025, Available at : http://www.jetir.org/papers/JETIR2507321.pdf