East Africa: Tz Records Least Inflation Rate in EAC

By Katare Mbashiru in Dodoma

TANZANIA recorded the lowest Annual Headline Inflation Rate compared to neighbouring Kenya and Uganda during the

month of July, 2020, the National Bureau of Statistics (NBS) has said.

According to NBS Acting Director of Population, Census and Social Statistics, Ruth Davison, although there is a slight increase in the annual inflation, Tanzania's rate went up to 3.3 per cent from 3.2 per cent that was recorded in June, 2020.

However, she insisted, Tanzania has the least annual inflation in the East African Community (EAC) bloc. This is because, the Uganda Bureau of Statistics reported 4.7 per cent inflation rate in July 2020, from 4.1 per cent reported in June, while Kenya National Bureau of Statistics reported a slight decrease of 4.36 per cent headline inflation rate from 4.59 recorded in June 2020.

However, the monthly change of consumer price index from June to July, this year has decreased by 0.2 per cent, which is similar to the trend that was recorded from May to June on account of decline of some food items.

The overall index has decreased to 120.50 in July from 120.74 recorded in June, this year. The decrease of the overall index is mainly attributed to the price decrease for food items.

Some of food items that contributed to such decrease include; rice by 1.9 per cent, maize grains by 2.9 per cent, maize flour by 1.6 per cent, sorghum grain by 2.8 per cent, sorghum flour by 2.6 per cent, sardines by 2.0 per cent, beans by 1.7 per cent, round potatoes by 1.7 per cent, sweet potatoes by 1.2 per cent and cooking bananas by 2.6 per cent.

Speaking at a news conference here yesterday, Ms Davison said Tanzania's increase of Headline Inflation rate from 3.2 per cent to 3.3 per cent explains that the speed of price change for commodities for the year ended July, 2020 had increased compared to the speed of price change recorded for the year ended June, 2020.

"The overall index went up to 120.50 in July, 2020 from 116.61 recorded in April, 2020," noted Ms Davison.

According to Ms Davison, in Tanzania, food and non-alcoholic beverages inflation rate for the month of July, 2020 stagnated at 3.8 per cent as it was recorded in June, 2020.

"Annual inflation rate for food consumed at home and away from home for the month of July, 2020 increased to 4.9 per cent from 4.7 per cent recorded in June, 2020," she noted.

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.