21 August 2012

Tanzania: Food, Energy Costs Cut Inflation Rate

Dar es Salaam, Tanzania — The decline of the speed of price increase recorded in June 2012 has pushed down a year-on-year inflation rate to 15.7% in July, the seventh consecutive monthly fall in the country for the first time.

This means that the annual headline inflation declined by 1.7 percentage points from 17.4% recorded in June this year, signalling a relief in people's purchasing power.

The National Bureau of Statistics (NBS) report on the national consumer price index for that month, released in Dar es Salaam last week, showed that the inflation rate went down from 17.4% in June to 15.7% in July.

"The decrease in the headline inflation rate for July 2012 explains that the speed of price increase for commodities in July has further decreased compared to the speed recorded in June 2012," the NBS said.

However, the overall index went up to 130.19 in July from 112.51 recorded in June. The drop in the headline inflation could be attributed to the decrease in the food and non-alcoholic beverages inflation to 20.8% from 23.5% in the previous month.

Slight affordability of goods was recorded in food consumed at home and away from home whose inflation rate declined from 22.9% in June to 20.3% in July.

There was a slight decrease in the inflation of non-food products from 10.5% in June to 10.0% in July. According to the NBS, the CPI excludes food consumed at home and restaurants, non-alcoholic beverages, petrol, diesel, gas, kerosene, charcoal and electricity.

"Excluding food and energy, which are the most volatile components in the total NCPI, could provide a more stable inflation rate figure for policy makers," it said.

The annual inflation rate, which excluded food and energy for July this year, has stagnated at 8.8% as in the previous month.

The annual inflation rate for energy has further decreased to 16.3% in July from 20.5% in June this year. However, the NBS reported that there was an increase in the monthly headline inflation rate of 0.1% in July, the same as that recorded in the previous year.

On the other hand, the overall index increased to 130.19% in July from 130.06% the previous month this year. This resulted from the increase in non-food prices.

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