Dar's inflation decrease fruitless, argues legislator

The decrease of inflation achieved so far is not something to celebrate unless the government establishes factors as to why the trend has not helped to ease the cost of living among ordinary people.
 
 Debating the 2013/13 budget estimates on Tuesday evening, Mr Festus Limbu (Magu – CCM) said the slightly sharp decrease of inflation should be a cause for concern for economists on government payroll, because so far the trend has not positively impacted on lives of the people.
 
May inflation rate in the country was recorded at 8.30 per cent, showing a huge contrast compared to the highest level it reached of 19.8 per cent in December, 2011. Mr Limbu, who is a former deputy minister for Finance, said for economists, such a sharp drop in inflation should be made concrete by stability in commodity prices, and thus have a positive impact.
 
“The government should explain this situation, it is very much worrying. There is no way inflation can drop sharply like this and yet people continue to complain of high prices of commodities. There is something wrong somewhere,” said Mr Limbu.
 
Many people who contributed to the debate pleaded with the government to review its decision to impose more taxes and levies on fuel, noting that this would push prices of almost all commodities up thus the increasing inflation.
 
According to National Bureau of Statistics year-on-year inflation dropped to 8.3 per cent in May, the lowest in two years time, largely due to a drop in food prices.
 
The heavily-weighted food and non-alcoholic beverages index eased to 8 per cent year-on-year, from 10.2 per cent in the previous month. Annual inflation rate for food consumed at home and away from home declined to 7.7 per cent in May, compared to 9.7 per cent in April.
 
In addition, the 12 month index change for non-food products increased to 9.2 per cent in May from 8.9 per cent recorded in the previous month. Prices for housing, water, electricity, gas and other fuels also slowed to 19 per cent from 19.9 in April.
 
However, transport prices accelerated to 7.5 per cent from 4.2 per cent in the previous month with costs of alcoholic beverages and tobacco climbing to 18 per cent from 17.7 per cent in April.
Source: The Citizen, reported from Dar es Salaam
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