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The annual inflation rate increased in December

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Ruth Minja, acting director of population census and social statistics, said the overall index rose to 104.92 last month, from 100.73 in December 2020,

The rise in prices of food and non-alcoholic beverages rose 4.9% from 4.4% the previous month in November, with annual inflation excluding food and non-alcoholic beverages falling to 3.9% from 4.0 % the preceding month.

The prices of rice increased by 3.7%, maize (5.2%), wheat flour (3.4%), maize flour (3.3%), sorghum flour (2.8%), she said.

Cow meat increased 3.0 percent, goat meat (1.6 percent), fish (5.3 percent), fruits (3.7 percent), vegetables (2, 3 percent) and potatoes (3.2 percent), she said.

Non-food items that drive inflation up include construction equipment (5.0%), gasoline (2.3%), kerosene (1.7%), diesel (6.7%) and gasoline (3.0%), she said.

In addition, the average annual inflation rate for food and non-alcoholic beverages declined to 4.2 percent in 2021 from 4.8 percent in 2020. The average annual inflation rate for all non-food items and soft drinks in 2021 also declined to 3.5 percent from 3.7 percent. registered in 2020.

Minja said, however, that the trend in inflation rates seen in 2020 and 2021 is still below the government’s inflation target of 5.0%, for economic growth consistent with a non-erratic operating environment, he said. he said, claiming that Tanzania continues to perform well in terms of maintaining stable prices of goods and services.

Inflation was on the rise in other partner states of the East African Community (EAC), with Uganda reaching 2.9% from 2.6% in November, while in Kenya the inflation fell to 5.73% from 5.8% the previous month.

Elisha Mkandya, a central bank economist, said inflation is not necessarily a bad thing as long as it does not exceed national targets.

“If the inflation rate exceeds 5.0%, it can have a negative impact on the economy,” he said, noting that the BoT was taking various measures to control the spike in prices.

Rising prices for various products are driven by increased demand, population growth and production spending, he added.