Inflation rate slowed down to 12.9 per cent in October, which is 15
months low, thanks to a slower rise in food prices and energy costs, National Bureau of Statistics (NBS) said yesterday.
The rate dropped from 13.5 of September to register a tenth straight
month drop since January this year when inflation clocked 19.7 per cent.
Also non food rate fell to 10.1 per cent from 10.5 per cent, while non
food and non energy rate dropped to 8.6 per cent to 8.6 per cent, signifying
further drop in the coming months.
Economists have it that the inflation rate
is expected to keep falling for the rest of the year to declining food prices,
but was unlikely to fall to single-digit levels before next year.
When interviewed, Open University of Tanzania Senior Lecturer
(Economics) Dr Hildebrand Shayo said the rate, despite going down was still too
high to subdue costs of living.
“Prices of commodities are still too high while
productivity has gone down, Dr Shayo said, adding that level of money in
circulation was high, while exports were not sufficing import bills.
However, he said, there is a need to make a through scientific analysis
by regressing the economic variables to determine the actual impact of current
level of inflation rate, which stands at a double-digit.
Another Dar es Salaam-based
economist, Mr Andrew Mushi, said reduction of less than 2 per cent does not
create positive impact on consumers, unless a significant drop is registered.
“Drop in inflation by one or two per cent is only felt when in the
basket, basic needs are affordable by majority especially in rural areas. The
impact would not be felt by a common man, as cost of living is still high,”
said Mr Mushi, former Urafiki Textile Mills General Manager.
He gave an example of how some prices had recently gone up, including
fuel, meat and maize flour prices, thus affecting the purchase power of
ordinary citizen, whose daily income had remained unchanged.
A cross-section of
people interviewed said that despite the declining of inflation rate, the
reality on the ground does not reflect the statistician’s analysis as the costs
of goods and services are still high.
"The reality on the ground is that commodity prices are still high
and costs of living are going up," Mr Leonard Joseph, a Tabata resident,
told the ‘Daily News’ in Dar es Salaam yesterday.
He said the prices of sugar
and rice, the main drivers of the inflation rate, remained high: “I beg to
differ with statisticians.”
Mid this year, the government reversed the single digit goal to mid
next year saying the previous date was not realistic due to pressures from
energy, food and fuel costs.
The Bank of Tanzania and International Monetary
Fund (IMF) previously projected that the inflation will hit a single-digit at
the end of June this year before rescheduling it to December and then next
June.
According to BoT’s Monetary Policy Statement of June 2012, the target
has been set to next June, expecting easing of pressures on global oil prices,
stability of shilling and food supply improvement.
“The projected general
decline in global inflation is expected to be also reflected in domestic
inflation trend… inflation is projected to continue with the downward trend in
the near to medium term,” the statement says.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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