March inflation falls to 19 per cent

Tanzania's year-on-year inflation rate slowed for the third straight month, to 19 percent in March from 19.4 percent a month earlier due to a fall in food and fuel costs, the state-run statistics body said on Monday.

The modest fall is expected to leave east Africa's second largest economy struggling to meet its target of single digit inflation by June.

Poor rains across much of east Africa for most of last year hit food security and electricity output, triggering spikes in the level of inflation and threatening economic growth.

The National Bureau of Statistics (NBS) said food prices edged down to 25.7 percent year-on-year in March from 26.7 a month ago, helping push inflation lower.

Food and alcoholic beverages account for almost half the total weighting in the consumer price index in Tanzania.

"Falling food and energy costs are the main reasons for the decline of the inflation rate in the year to March 2012," Ephraim Kwesigabo, the director of population census and social statistics at NBS, told Reuters.

The World Bank has backed the government's forecast that inflation could be lowered to single digits by mid-2012, while the International Monetary Fund has said it expects this to happen by the end of the year.

Electricity and gas costs stood at 17.4 percent year-on-year in March 2012 versus 19.5 percent a month earlier.
Source: Reuters,af.reuters.com, reported by Fumbuka Ng'wanakilala in Dar es Salaam
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