This research report set out to investigate the relationship between inllation rate and economic growth rate(% annual GDP) in Tanzania (1992-2012), the study employed time series survey data since examined data for a short time ,its objectives were; to establish the trend of import in Tanzania (1992-2012), to establish the trend of GDP growth of Tanzania (1992-2012), to investigate the relationship between Inflation rate and GDP gnm th rate in Tan:rania ( 1992- 2012), the hypothesis of the study was there is no signilicant relationship bet"c'c•n inflation rate and GDP growth rate in Tanzania time series analysis such Correlation analvsis. rq2ression analysis mechanisms were used. The trend of inflation rate has shown a general decrease over the period under study and GDP growth rate has shown a general increase for the period under study. Using the correlation, regression approach, there was a strong negative correlation between inflation rate and GDP growth(r=-0.805 ),there was a relationship betwcrn inflation rate and GDP growth at 0.05 level of significance, stationarity was tested and found that both inflation rate and GDP has trend by using ACF and PACF. There is relationship between Inflation Rate and growth Rate in Tanzania which agreed with Khan ( I 98() ). Tobi ( I 98:i 1. Coo le> (1988) study on inflation rate and GDP growth rate. The study has ,is,1 supported the theory of aggregate demand stated by Keynes (1883-1946) which state that there is a negative relationship between Inflation and Economic growth.
