Inflation in Tanzania decreased for the fourth consecutive month to 4.8 per cent in December 2014 from 5.8 per cent recorded in November as food prices slowed in the month.The decrease of the inflation rate for the year ending December 2014 explains that the speed of price increase for commodities has decreased in that period as compared to the speed of price increase recorded for the year ended November, according to the National Bureau of Statistics (NBS).
NBS said the improved supply of food items in the market which sent prices down was accompanied by a fall of fuel prices in the country. The 4.8 per cent level is the lowest in the last four years, figures from the data agency show.
“Prices of some food products like maize, maize flour and cassava slowed in the market and pushed down the inflation rate,” said Mr Ephraim Kwesigabo (pictured), director of population census and social statistics at NBS.
Food inflation slowed to 5.7 per cent from 6.9 per cent in the same period.
Food and non-alcoholic beverages account for 47.8 per cent weight in the consumer price index used to calculate the inflation rate.
Food and energy are also the most volatile components in the index.
The average inflation rate for 2014 is 6.1 per cent, down from 7.9 per cent recorded in 2013, Mr Kwesigabo said.
At the same time, the bank of Tanzania is targeting an average of 5 per cent by June 2015.
“We will go on implementing our tight monetary policy until we get to that level. Looking forward, the indicators are favourable and we expect it will slow further,” said Mr Johnson Nyella, manager for economic research at the Bank of Tanzania.
He said fuel prices were still going down while there was no sign of food shortages in the near future.
The executive board of the International Monetary Fund (IMF) also completed its first review of Tanzania’s economic performance under the program supported by the Policy Support Instrument (PSI) on Wednesday and said the inflation rate was consistent with the government target.
“Macroeconomic developments in Tanzania remain favourable. Economic growth was strong during the first half of 2014 and is expected to remain close to 7 per cent.
Inflation remains in mid-single digits, consistent with the authorities’ target of 5 per cent by June 2015,” said Min Zhu, IMF deputy managing director in a statement.
The data also shows that purchasing power of Sh100 decreased to Sh66.26 in December 2014 from September 2010.
Kenya’s inflation rate slowed to 6.02 per cent in December from 6.09 in November while that of Uganda went down to 1.8 per cent from 2.1 per cent.
Source: The Citizen, reported from Dar es Salaam, Tanzania
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