Tanzania’s annual CPI inflation cools to 5.9% in October on lower food costs

By bne IntelliNews November 10, 2014

Tanzania's headline annual inflation decelerated to a 10-month low of 5.9% in October from 6.6% the month before due to a slower growth in food prices, data from the country’s National Bureau of Statistics (NBS) showed. Compared to the previous month, Tanzania’s consumer prices fell 0.2% in October, following a 0.4% increase in September.

Prices of food and non-alcoholic beverages, which have a 47.8% weight in the CPI basket used to measure inflation, climbed 7.1% y/y last month, slowing from an 8.5% growth in September. The y/y growth in transport prices (9.5% weight) also eased – to 1.6% from 2.0%. On the other hand, the costs for housing, water, electricity, gas and other fuels (9.2% weight) rose 10.8% y/y, accelerating from a 10.7% growth in September.

The annual core inflation rate, which excludes the most volatile components food and energy, edged up to 3.2% last month from 3.1% in September.

The International Monetary Fund (IMF) forecast in May that Tanzania's inflation would gradually slow to the central bank’s 5% medium-term target. In its October World Economic Outlook, the IMF saw Tanzania’s average annual inflation falling from 7.9% in 2013 to 5.9% this year and further to 4.9% next year.

y/y inflation rate Oct-14 Sep-14 Oct-13 weight
Headline inflation 5.9% 6.6% 6.3% 100.0
Food inflation (combining food consumed at home and food consumed in restaurants) 7.0% 8.3% 7.3% 51.0
Non food inflation 4.6% 4.6% 6.1% 49.0
Energy inflation (combining electricity and other fuels for use at home with petrol and diesel) 11.6% 12.1% 10.6% 5.7
Core inflation (all items less food and energy) 3.2% 3.1% 5.7% 43.3
Source: National Bureau of Statistics        

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