For six consecutive months on a row now, Tanzania’s headline inflation has been increasing largely due to the rise in prices of some commodities following supply-side constraints.
The same pattern has been observed in other East African Community (EAC) Partner States.
According to the Bank of Tanzania (BoT) Monthly Economic Review for October released this week, despite the rise, the rate has remained within the country’s medium-term target of 3-7 percent and in line with EAC and Southern African Development Community (SADC) convergence criteria and.
The twelve-month headline inflation was 4.8 percent in the period under review, higher than 4.6 percent recorded in August 2022 and 4 percent of in corresponding month of 2021.
Low food crops harvests associated with unfavourable weather conditions during the 2021/22 crop season, prompted further increases in the twelve-month food inflation for September 2022. Food inflation (food and non-alcoholic beverages) was 8.3 percent compared with 7.8 percent in August 2022 and 4 percent in the corresponding period in 2021.
Much of the increase was attributed to a rise in prices of maize (grain and flour), rice, beans, wheat, fish, sorghum and fruits.
Non-food inflation also went up to 3.5 per cent from 3.4 per cent in the preceding month but is lower than 4.1 percent recorded in the corresponding period of 2021.
Energy, fuel, and utilities sub-group inflation continued to ease, reaching 7.9 percent in September 2022, down from 9.6 percent in the preceding month.The slowdown was mainly due to a decrease in domestic pump prices, consistent with declining prices of white products in the world market. Nevertheless, the rate was higher than 4.6 percent recorded in the corresponding period in 2021.
Core inflation, whose index accounts for the largest share (73.9 per cent) in the consumer price index (CPI), slightly increased to 3.3 percent in September 2022 from 3.2 per cent in the preceding month, mainly on account of a rise in prices of some items including garments, health services, information and communication, recreation, sports, and culture. However, it was lower than 4.6 per cent recorded in the corresponding period in 2021.
Meanwhile, domestic prices of petrol, diesel and kerosene decreased by 10.1 per cent, 4.9 per cent, and 5.5 per cent, respectively, compared with the preceding month.
The outturn is explained by a decrease in global demand amid recessionary fears and emerging new cases of COVID-19 in China—the main global importer of oil. On annual basis, prices were higher than those in the corresponding period in 2021.
All selected food crops recorded an increase in prices compared with prices recorded in September 2021, with rice recording the highest annual increase followed by maize.
On monthly basis, the highest increase was recorded in beans prices. Increase in wholesale prices is associated with high demand for food, especially from the neighbouring countries.