The inflation has slightly dropped by 0.3 percentage points to 19.4 per
cent, thanks to slackened speed of price increase during the month of February
that cushioned electricity price hike.
This is a second month in line the inflation to drop (see chart).
The National Bureau of Statistics (NBS) on Thursday attributed the
decrease to food and non alcoholic beverages rate which slid to 26.7 per cent
last month compared to 27.8 per cent in January.
"The decrease indicates a low speed of commodity price increase in
February compared with January," NBS said in the statement.
On food consumed at home and away, inflation climbed down to 25.5 per
cent from 26.2 in January while the
yearly index change for non food products remained steady at 11.8 per cent in
the two months.
The energy inflation jumped to 33.5 per cent in the month under review
from 30.1 per cent of previous month: "The increase is highly attributed
to the increase of price of electricity by 36.7 (40.29 per cent) per
cent," the report indicates.
The consumer price index (CPI) is used for deciding the country's rate
of expansion while consumption determines the saving and investment rates of an
economy to determine the Gross Domestic Product (GDP) growth pattern.
Two days ago, the International Monetary Fund (IMF) predicted a drop in
inflation to a single-digit towards the end of the year.
But economists say the 40.29 power hike will impact on consumer
spending patterns as it will weaken their purchasing power.
Dr Honest Ngowi of Mzumbe University's Dar es Salaam Business School
said power tariff increment pushed up production costs.
"The 7.0 per cent growth projection by the IMF is too optimistic.
A 6.0 per cent prediction or even slightly below that is more realistic,"
he said.
Dr Haji Semboja of the University of Dar es Salaam was in support
of 'favourable and stable economic
growth."
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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