Food prices push Tanzanian inflation higher again;

nngu007 · 2011-03-22T14:01:20+00:00

Sat Mar 19, 2011 12:46pm GMT * Same inflation trend in Kenya, Uganda, Tanzania * Food prices up 3.0 percent during the month * Analysts see double-digit rate in second half DAR ES SALAAM, March 19 (Reuters) - Tanzania's year-on-year inflation rate TZCPIY=ECI rose for a fourth consecutive month in February on the back of higher food and fuel prices, staying in step with trends at east African neighbours Kenya and Uganda. Tanzania's National Bureau of Statistics said on Saturday that consumer prices rose 2.2 percent in February, helping push the country's inflation rate to 7.5 percent from 6.4 percent a month earlier. The International Monetary Fund said on Friday it expected food and fuel prices to drive inflation higher this year, and analysts warned on Saturday it could soon hit double digits. "All signs show Tanzania's inflation rate is going up and up this year," said Honest Ngowi, an economics lecturer at Mzumbe University. "Food production hasn't been good in Tanzania. The future is even worse for the inflation rate, because power is still a major problem, the fuel crisis is still biting and the Japanese earthquake could impact on global fuel prices." The statistics office said in a statement that the food and non-alcoholic beverages component of the consumer price basket rose 3.0 percent in the month, after rises of 2.9 percent in January and 2.6 percent in December. Food and non-alcoholic drinks have a 47.8 percent weighting in the consumer price basket, so they have a major impact on the overall inflation rate in the region's second largest economy. The monthly food price rise left the year-on-year rate of inflation for the component at 9.2 percent, behind the inflation rate for housing, water, electricity, gas and other fuel, which was running at 11.1 percent in February. Inflation rates in Kenya, Tanzania and Uganda, the three largest economies in the East African Community, last slowed in October. Since then, higher food and fuel prices have helped push year-on-year rates to 6 percent or above. Tanzania had the highest inflation rate in February, ahead of Kenya's at 6.5 percent and Uganda's at 6.0 percent, and analysts said chronic power shortages in Tanzania may also contribute to rising inflation in the coming months. "The inflation rate is going to accelerate further. We still haven't resolved the power crisis in the country," said Humphrey Moshi, an economics professor at the University of Dar es Salaam. "The disturbances in the Middle East are spreading to more oil-producing countries. This will obviously lead to higher crude oil prices," he said. "If the government doesn't take serious measures, we will definitely see a double-digit inflation rate in the second half of this year," Moshi said.

Thread starter nngu007
Start date Mar 22, 2011

nngu007

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Food prices push Tanzanian inflation higher again;

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