The year-on-year inflation has hit a
single-digit rate of 9.8 per cent for the first time in the last 21
months, signifying a robust economic outlook this year.
The last time
the rate was at a single-digit was in June 2011 when it stood at 9.7 per
cent.
Then it climbed to reach an all-time
high figure of 19.8 per cent in December 2011. According to National
Bureau of Statistics (NBS), the March headline inflation decelerated to
9.8 per cent down from 10.4 of February supported by declining food
prices while prices of non food items increased slightly.
But economists said it was too early to
celebrate the single-digit as the rate was yet to be out of the wood
while descending at a snail's-pace that failed to bring back the desired
outcomes.
The Mzumbe University's Dar es Salaam
Business School Senior Lecturer (Economics), Dr Honest Ngowi, told
'Daily News' yesterday that last month the inflation rate was a good
figure but "it is too early to celebrate."
"May be we have started the journey to
the real single-digit," Dr Ngowi said yesterday. "But we have to have
good policy to maintain the rate otherwise the recent bus fare hikes
might drag the rate back to the double digit."
The economist also said
that the energy and transport baskets on CPI -- consumer price index --
was still on the high side hence increasing the inflationary pressure on
the index.
"The declining trend should also be felt
in people's pockets, otherwise it makes no sense," Dr Ngowi said adding
that the rate was climbing down at a snail's pace.
A Tanzania
Securities' 'Equity Research on Local Listed Banks' report released last
month says the inflation rate was expected to improve persistently this
year, but it warned on the possibility of going back to the double
digit on the back of high food and energy prices.
"There are some indications that
inflation is now bottoming out," the report said. "We are forecasting
consumer price inflation to drop into the high single digits in the
first quarter of 2013.
"…But expect inflation to return to double digits
in the second quarter (and to) average 12 per cent over the year,
significantly above the average of 6.9 per cent over 2000-10."
The document attributed the prediction
to increases in food and energy prices which remain relatively contained
as the strong momentum in the all items indicates more structural
inflationary pressures.
On other hand, the International Monetary Fund
(IMF) has already said the rate was expected to climb down to below 10
per cent at the end of June, this year, on the back of ongoing
structural reforms in the fiscal area that will play a crucial role
toward medium-term fiscal adjustment.
"(Thus) a slight reduction in the growth
of monetary aggregates is expected to bring inflation below 10 per cent
by end June 2013," IMF said early this year when answering the
country's letter of intent.
Though the institution acknowledged on its
Country Report that the inflation has gradually declined, it has not yet
"reached the authority's single-digit objective".
The rate was in a down-climbing-gear
since last January after it reached an all-time high in the last 15
years in December 2011 of 19.7 per cent, but in March descending to 9.8
per cent.
Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza
0 comments :
Post a Comment