INFLATION REMAINED LOW AND STABLE

Inflation remained low and stable, driven by both food and non-food inflation with the former having significant influence due to satisfactory harvests in most parts of the country during 2016/17 crop-season.

A monthly economic review by the Central bank of Tanzania (BoT) for February 2018 notes that twelve-month headline inflation stabilized at 4.0 percent for two months in a row—December 2017 and January 2018, lower than 4.4 percent in November 2017 and 5.2 percent January 2017.

Noteworthy, the annual inflation was the lowest since January 2015 and below the medium target of 5.0 percent.

On month-to-month basis, headline inflation was 0.8 percent in January 2018, same as in the corresponding period in 2017.

“Inflation rates of all the main groups were below headline inflation, except those of food and non-alcoholic beverages, and housing, water, electricity, gas and other fuel,” the bank said on a report.

Annual food and non-alcoholic beverages inflation was 6.3 percent compared with 6.2 percent in December 2017 and 5.2 percent in January 2017.

On month-to-month basis, food and nonalcoholic inflation was 1.7 percent in January 2018, compared with 1.6 percent in January 2017.

Twelve-month non-food inflation was 2.8 percent for two consecutive months, the lowest since September 2016. This is partly associated with stabilization of input prices, particularly energy prices, and a seemingly streamlined household expenditure pattern. On month-to-month basis, inflation of non-food was 0.3 percent in January 2018, same as in the corresponding period in 2017.

Annual energy and fuel inflation was to 10.4 percent in January 2018, lower compared with 11.4 percent in December 2017 and 11.5 percent in the corresponding period in 2017. On month-to-month basis, it was 0.3 percent in January 2018, lower than 1.2 percent in January 2017.

Twelve-month Inflation for all items excluding food and energy, which is used as a proxy for core inflation, slightly edged up to 1.4 percent in January 2018 from 1.3 percent in December 2017, but was lower than 2.3 percent registered in the corresponding period in 2017.

Month-to-month core inflation was 0.3 percent in January 2018 compared with 0.2 in the corresponding period in 2017.