Dar Es Salaam — TANZANIAN consumer prices fell 0.4 percent in July, driven by falling food costs official data showed, and analysts said they expected the declining trend to continue.

The headline annual inflation rate slowed to 6.3 percent. The rate of inflation has been slowing across east Africa in the past few months after strong rains and government investment in agriculture boosted food production.

"This is a good trend, we expect the inflation rate to continue falling with better food harvests," said Aloyce Mwamanga, president of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) .

Tanzania registered an inflation rate of 7.2 percent in June, missing a government target of below 6 percent. Month-on-month, food prices, which carry a 55.9 percent weighting in the Consumer Price Index, fell 1.5 percent in July, easing the year-on-year rate of food inflation to 5.6 percent compared to 7.1 percent in June.

NBS said the main food items that contributed to the price decreases included cereals and cereal products, cassava, potatoes, cooking bananas, fruit, fish, beans, cowpeas, groundnuts and coconuts.

Year-on-year consumer prices in non-food products eased marginally overall, although fuel, power and water prices jumped 19.5 percent. Analysts said a weakenin shilling could exert pressure on the inflation rate.

"Despite the declining food prices, the government needs to address the depreciation of the currency (shilling) to ensure it does not affect the low inflation rate," said Mwamanga.

He also said government spending ahead of October presidential and parliamentary elections could see inflation rising in the coming months.