Abstract. This study examines the threshold effect of inflation on Tanzania’s economic growth using annual data from 1990–2024 and a quadratic regression within the ARDL framework. The analysis identifies a clear inflation threshold at 5.82%, indicating that inflation’s impact on growth turns negative beyond this point. Tanzania has mostly maintained inflation below this level since 2015, coinciding with stable growth, suggesting the economy has operated within a safe inflation zone. Therefore, the Bank of Tanzania should keep inflation below 5.8% through coordinated monetary–fiscal policies and strong data monitoring to maintain moderate, stable inflation that supports long-term growth.

Keywords: ARDL, Economic growth, Inflation, Non-linear, Quadratic regression, Threshold.