Tanzania’s Inflation To Remain Within Target Of 5.4 Percent In 2022/23

By Prosper Makene

Tanzania’s inflation will remain within the target of 5.4 percent in 2022/23, the Bank of Tanzania (BoT)’s Monthly Economic Review (MER) for June published on Wednesday said.

The Monthly Economic Review also said that the headline inflation has been maintained on a downward movement for the fourth consecutive month, reaching 4 percent in May 2023, primarily attributed to moderation in both food and non-food prices, in line with the overall decrease in consumer goods prices in the global market.

“The rate was also within the country’s target, as well as East African Community (EAC) and Southern African Development Community (SADC) convergence criteria,” the Review said.

It added: “The outlook suggests that inflation will remain within the target of 5.4 percent in 2022/23. The positive projection is attributable to several factors, including anticipated further moderation in global consumer goods prices, satisfactory food supply, and continued implementation of prudent monetary and fiscal policies.”

The MER went on to say that food inflation, particularly unprocessed food, remained the primary driver of overall inflation for the past eight months.

“In May 2023, food inflation, including non-alcoholic beverages, decreased to 8.5 percent from 9.1 percent in the previous month, but higher than the rate recorded in May 2022. Prices of most major food crops were higher than in the corresponding month in 2022, save for finger millet,” it said.

It noted: “On a monthly basis, all major food crops recorded price easing, except beans and round potatoes, with maize and rice—the main staple foods—recording a notable decrease in prices. This reflects an improvement in the food supply situation in the country.”

To ensure food availability and stability in food prices, the National Food Reserve Agency (NFRA) continued to supply food to councils facing shortages at subsidized prices. In May 2023, the NFRA sold 12,344 tonnes, leading to a decline in its stock to 51,367 tonnes at the end of the month.”