BoT pleases with decline of inflation

The Bank of Tanzania (BoT) has welcomed a slight decline of inflation, vowing to deploy more tight monetary policy measures to ensure economic stability.

Central bank’s Director of Policy and Research Joe Masawe said in Dar es Salaam over the weekend that projections show that inflation is to drop further in future to single digit, thanks to government fiscal measures. 

“A slight change of inflation downward is a combination of joint efforts of both monetary and fiscal policies,” Dr Masawe remarked.

According tot the National Bureau of Statistics (NBS), inflation went down slightly by 0.1 percentage points to close the month of January at 19.7 per cent, relieving consumer spending. 

The prices of food and fuel which are among the economic fundamentals that fuel inflation remained stable during the month. Likewise, exchange rate and power availability stabilised as well.

The report released by the NBS last week shows that kerosene and charcoal prices went down by 2.3 per cent and 0.7 per cent, respectively pulling down the Consumer Price Index (CPI). 

A small change in prices for charcoal has a big impact on the complied index for energy and fuels because charcoal accounts for more than half of 2.5 per cent of the total expenditure for energy and fuel, stated the report.

NBS figures, for food and non alcoholic beverage indicates that the monthly index climbed by 3.5 per cent while yearly figure stands at 27.8 per cent change. 

The index is the heaviest as it weighs 47.8 per cent of CPI. The food index increase is attributable to increased prices of rice by 13.6 per cent, bread (2.4), wheat flour (3.9), meat (2.0), fish 95.2), fresh milk (2.7), eggs (3.4) and vegetable (5.6).

Other non-food items are men’s suit 9.7 per cent, primary school uniform (3.5), rents (6.5) car tyre (4.3) exercise books (4.8), private primary school fees (5), private secondary school fees (2.9) and toilet soaps (6.5). The inflation eroded the purchasing power of the local currency in September 2010 to 80/23 in January 2012.
Source: The Daily News,www.dailynews.co.tz, reported by Sebastian Mrindoko
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