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Tanzania's inflation drops to 4.8 pct in December

Xinhua, January 9, 2015 Adjust font size:

Tanzania's National Bureau of Statistics (NBS) said on Thursday the east African nation's inflation rate dropped to 4.8 percent in December 2014 from 5.8 percent recorded in November because of a fall in food prices.

Prices of some food products like maize, maize flour and cassava went down in the market and pushed down the inflation rate, Ephraim Kwesigabo, NBS director of population, census and social statistics, told a press conference in the commercial capital Dar es Salaam.

Kwesigabo said that food inflation fell to 5.7 percent from 6.9 percent during the period under review.

He said the speed of price increase for commodities has decreased in the period, which explained the decrease of the inflation rate in the end of the year.

Food and nonalcoholic beverages account for 47.8 percent weight in the consumer price index which is used to calculate the inflation rate, he said.

Energy was also the most volatile component in the index, he said, adding that the average inflation rate for 2014 was 6.1 percent, down from 7.9 percent recorded in 2013.

Johnson Nyella, the manager for economic research in the Bank of Tanzania, said the bank was targeting an average of 5 percent inflation by June 2015.

"We will go on implementing our tight monetary policy until we get to that level. Looking forward, the indicators are favorable and we expect it will slow further," said Nyella.

He said fuel prices were still going down while there was no sign of food shortages in the country in the near future.

The executive board of the International Monetary Fund (IMF) also completed its first review of Tanzania's economic performance under a program supported by the Policy Support Instrument (PSI) and said on Wednesday the inflation rate was consistent with the government target. Endi