27 December 2012

Tanzania: Inflation Drops Slightly

Photo: futuradosmil/Flickr
Tanzania Currency: Government cautioned against borrowing from local commercial banks.

DAR ES SALAAM — Tanzania inflation has slightly dropped to 12.1% as of November from 12.9% that was recorded in October the previous month due to the decline in food prices and energy costs.

The National Bureau of Statistics (NBS), Director of Population and Social Statistics, Mr. Ephraim Kwesigabo, said in Dar es Salaam that there were a number of variables that attributed to sluggish pace fall of inflation rate compared to other East African countries.

Kwesigabo explained one of the reasons for the slow pace in the drop in inflation rate was due to the exchange rate and monetary policy issues, saying the report assist policy makers to strategize actions to be taken while insisting that the country's economy was doing well especially with the low price to food stuffs.

He said the inflation rate was expected to keep on falling due to declining food prices in the country noting that the inflation rate, despite going down was still too high to subdue cost of living.

"Prices of commodities were still too high while productivity has gone down, and the level of money in circulation was high too and exports do not suffice import bills" Kwesigabo said.

Kwesigabo said that the drop in inflation by one or two per cent is only felt when there is affordability of basic needs in the basket by the majority of the citizens especially those residing in the rural areas.

He also noted that prices had recently gone up, including fuel, meat and maize flour prices, thus affecting the purchasing power of ordinary citizen, whose daily income had remained unchanged.

Mid this year, the government revised the single digit goal to mid next year saying the initial date was not realistic due to pressure from energy, food and fuel costs.

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