9 February 2017

Tanzania: Inflation Rises Slightly

The annual headline inflation rate for last month slightly increased to 5.2 per cent from 5.0 per cent recorded in December 2016, due to an increase in food price, the National Bureau of Statistics (NBS) has said.

The NBS Population Census and Social Statistics Director, Mr Ephraim Kwesigabo, told reporters in Dar es Salaam yesterday that, the increase of the overall index was attributed to price increase of both food and non-food items.

"The speed of price increase for commodities ... has increased compared to the speed of price increase recorded for the year ended December 2016," Ephraim Kwesigabo, a director at state-run NBS told a news conference. It said the headline inflation rate month-on-month in January was 0.8 percent from 0.7 per cent previously.

The inflation rate for food and non-alcoholic beverages increased to 7.6 per cent from 7.0 per cent in December, he said. Food prices carry the biggest weight - at 38.5 percent - in the basket of goods and services used to calculate the country's inflation rate, followed by transport and fuel prices. Mr Kwesigabo said annual inflation rate for food consumed at home and away from home has increased to 8.2 per cent in January, 2017 from 7.4 per cent in December, 2016.

In addition, he said the 12 month index change for non-food products has increased to 3.6 per cent in January, 2017 as compared to 3.8 per cent in December, 2016. On the annual inflation rate which exclude food and energy for the month of January, 2017 has increased to 2.3 per cent from 2.5 per cent recorded in December, 2016.

He said the National Consumer Price Indices (NCPI) used to compute this type of inflation rate excludes food consumed at home and restaurant, non-alcoholic beverages, petrol, diesel, gas, kerosene, charcoal, firewood and electricity.

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

Monthly headline inflation rate for the month of January, 2017 has increased by 0.8 per cent compared to an increase of 0.7 recorded in December, 2016. The overall index has increased to 105.92 in January 2017 from 105.04 recorded in December, 2016.

The increase of the overall index is attributed to price increase of both food and non food items. Some food items that contributed to such an increase include; maize grains by 16.0 per cent, maize flour by 10.0 per cent, rice by 2.6 per cent, beans by 6.3 per cent, cooking bananas by 5.8 per cent, cocoyam by 5.3 per cent and sweet potatoes by 2.5 per cent.

On the other hand, non food items that contributed to such an increase include; charcoal by 3.2 per cent and refrigerators by 2.4 per cent. Mr Kwesigabo further said that the purchasing power of the consumer's Tanzanian Shilling measures the change in the value of consumer goods and services that a Tanzanian Shilling could buy at different periods.

"If the overall level of Consumer Price Index (CPI) goes up, the purchasing power of a Tanzanian Shilling goes down, the purchasing power of 100 Tanzanian Shillings has reached 94 shilling and 42 cents in January, 2017 compared to 95 shilling and 20 cents in December, 2016," he elaborated.

Regarding inflation rates for the three selected East African Community (EAC) member states of Tanzania, Kenya and Uganda he said, annual headline inflation rate for the month of January, 2017 has increased in all three countries compared to the rate recorded in December, 2016.

In Uganda has reached 5.9 per cent from 5.7 per cent and Kenya has recorded 6.99 per cent from 6.35 per cent.

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