The inflation rate went to over two and half years’ low rate of 6.1 per cent last month, showing that the country’s economy is on the right track. National Bureau of Statistics (NBS) indicates that the inflation descended from 6.7 per cent of August to 6.1 per cent in September, this year.
National Bureau of Statistics (NBS)
The decline, according to NBS, was supported by all four major measures of inflation index – energy, food and non-food and non-energy – that also decreased satisfactorily in September.
The new National Consumer Price Index released by NBS on Tuesday for September also indicated that the Annual Inflation Rate for energy and fuels has decreased to 9.6 per cent in September compared to 15.2 recorded in August.
NBS Principal Statistician and Manager for Labour and Price Statistics Department, Ms Ruth Minja, said that basically, the increase of month to month inflation rates is attributed to the price increase, both in food and non-food items.
However, she added, the monthly headline inflation rate for September has increased by 0.5 per cent, compared to a decrease of 0.1 per cent in August due to the increase in the price of some basic food items.
“The annual inflation rate, which excludes food and energy for September, has decreased to 5.8 per cent from 6.2 per cent recorded in August,” Ms Minja said. She mentioned food items that contributed to the monthly headline inflation rate increase as maize, wheat flour, fresh fish, fruits, natural groundnuts, round potatoes; cassava flour, sugar, honey and pastry cook products.
On the purchasing power of the Tanzanian shilling for September, Ms Minja said findings have shown that such power has decreased to 71.12/- in September compared to the same month last year.
‘’On the average, energy and fuel index and food and non- alcoholic beverages index have had a higher upward trend over the same period compared to other indices,’’ she remarked, adding: “Energy and fuels portrayed unstable price movements compared to other indices and all items without food and energy indicated a much stable price movements.’’
However, Ms Minja said due to lack of resources, NBS was still unable to conduct surveys of the variations in purchasing power between the rural and urban populations. Reacting on the decrease in inflation, the Mzumbe University’s Dar es Salaam Business School Senior Lecturer (economics), Dr Honest Ngowi, said the figures impressively suggest that the economy is heading into the right direction statistically.
“It indicates that we are now at a proper single digit…it’s a good figure statistically,” Dr Ngowi told the ‘Daily News’ on Tuesday, adding that the policy goal of attaining between 4 to 5 per cent is realistic.
The economist said the decline indicates that the living standard is better. But unfortunately, when we talk to people, the decline is not reflected in their normal lives. “The decline should be felt into the people’s pocket since low inflation means that life is better now,” Dr Ngowi said in a brief tele-interview.
The economist told the ‘Daily News’ that since the inflation has gone down satisfactorily, it has to reflect on loans’ interest to spur development. “I think it is now high time we saw banks’ interest rates going down and more FDIs (foreign direct investments) coming to the country,” Dr Ngowi opined.
While the Tanzania rate descends to a pleasing level, in Kenya and Uganda the inflation rate climbed up in September to 8.29 per cent and 8.0 per cent from 6.67 per cent and 7.3 per cent in August respectively.
Tanzania’s inflation rate averaged 7.72 per cent from 1999 until 2013. It reached an all time high of 19.8 per cent in December, 2011 and a record low of 3.4 per cent in February, 2003.
By ABDUEL ELINAZA and PIUS RUGONZIBWA, Tanzania Daily News
