East Africa: Headline Inflation Nosedives Across EA

By Katare Mbashiru in Dodoma

EAST African countries have continually recorded falling inflation rates, with Uganda recording the

least headline inflation compared to Kenya and Tanzania for the year ending May 2020, the National Bureau of Statistics (NBS) has said.

Speaking at a news conference here yesterday, NBS Acting Director of Population, Census and Social Statistics, Ms Ruth Davison, said Tanzania's annual headline inflation rate for the month of May decreased to 3.2 per cent from 3.3 per cent recorded during the corresponding period in April 2020.

She said the decrease of the headline inflation meant the speed of price change for commodities for the year ended May, 2020 had decreased compared to the speed of price change recorded for the year ended April, 2020.

"The overall index went up to 120.93 in May, 2020 from 117.23 recorded in April, 2020," noted Ms Davison.

The Uganda Bureau of Statistics reported 2.8 per cent inflation rate in May, from 3.2 per cent reported in April, while Kenya National Bureau of Statistics reported a slight decrease of 5.47 per cent headline inflation rate from 5.62 recorded during the corresponding period in April 2020.

According to Ms Davison, in Tanzania, food and non-alcoholic beverages inflation rate for the month of May, 2020 decreased to 4.4 per cent from 4.6 per cent recorded in April, 2020.

"Annual inflation rate for food consumed at home and away from home for the month of May, 2020 stagnated at 5.2per cent as it was recorded in April, 2020," she noted.

"On the other hand, the 12-month index change for non-food products in May, 2020 has decreased to 2.4per cent from 2.5per cent recorded in April 2020," added Ms Davison.

The National Consumer Price Index (NCPI) used to compute this type of inflation rate excludes food consumed at home and restaurants, petrol, diesel, gas, kerosene, charcoal, firewood and electricity, the NBS official further revealed.

"Excluding food and energy which are the most volatile components in the total NCPI provides a more stable Inflation Rate figure for Policy Makers," explained Ms Davison.

The NCPI measures the change over time in the cost of a fixed basket of goods and services that are purchased by a representative sample of households in Tanzania.

A basket includes a list of 278 goods and services of which 97 are Food and Non-Alcoholic Beverages and 181 are Non-Food items that are being priced on a monthly basis.

The NCPI weights are based on monetary expenditures relating to consumption for all households in the 25 geographic regions of Tanzania Mainland.

The index weights are based on expenditures of both urban and rural households derived from the 2011/12 Household Budget Survey and the price reference period is December, 2015.