Fear as Dar inflation rises for 14 consecutive months

BY BUSINESS REPORTER

TANZANIA’S annual inflation rate has been rising for the 14th consecutive months  with the latest official records released by the National Bureau of Statistics (NBS)  indicating the figure to have surged to 19.8 percent  in December last year as compared to 19.2 percent that was recorded in November.

President Jakaya Kikwete during an economic forecast earlier this year was however optimistic that the year-on-year inflation rate would fall to single digits by June this year following an increase in production.

This means that consumers will have to dig deeper into their pockets since food and fuel costs will continue to push consumer prices higher.

According to the latest report by NBS) food prices rose 2.0 percent during December, pushing the year-on-year inflation rate to 19.8 percent from 19.2 percent in November.

"The inflation rate will continue to rise in Tanzania over the coming months because the rains have been erratic and global oil prices are still high. The recent hike in power tariffs will also push consumer prices up," said Humphrey Moshi, professor of economics at the University of Dar es Salaam.

Inflation rose throughout East Africa member states for most of 2011 rose, driving interest rates through the roof, unsettling local bond markets, and causing social tension and street protests in Uganda.

However, the rates of inflation in Uganda and Kenya appear to have turned the corner, analysts say, after an aggressive tightening of monetary policy in both economies. Tanzania has taken some steps to tackle rising prices, but not the same monetary shock therapy administered by its neighbors.

Food and non-alcoholic beverages rose 27.1 percent for the year ended December from 26.1 percent in November, NBS said, energy prices rose 41 percent year-on-year from 39.2 percent in November.

Tanzania's state-run power company raised electricity tariffs by 40.29 percent on January 15, citing rising costs of energy generation from oil-fired turbines and fuelling inflationary expectations.