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Inflation decreases as purchasing power falters

16th February 2013
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National Bureau of Statistics

Annual headline inflation declined in January this year to 10.9 per cent from 12 per cent recorded in December last year.

A monthly report released yesterday by the National Bureau of Statistics (NBS) shows a decrease in annual headline inflation for January, with slower price increases for commodities compared to   December. 
 
NBS figures show that monthly headline inflation for January stood at 1.3 percent compared to 1.9 per cent in December 2012. 
 
The overall index increased to 138.26 in January 2013 from 136.48 in December 2012, attributed to the price increases in both food and non food items.
 
Food items that contributed to the increase rice whose price increase was 2.7 per cent from the previous month. Maize grains prices rose by 4.5 per cent, maize flour by 12.7 per cent, finger millet by 5.3 per cent, fried fish by 6.1 per cent, fruits by 4.0 per cent, root crops by 7.4 per cent and vegetables by 4.6 per cent. 
 
Non-food items that contributed to the increase in the monthly inflation rate include garments for men by 1.0 per cent, cleaning products by 1.4 per cent, school fees by 1.5 per cent and hair dressing by 1.5 per cent.
 
The annual inflation rate for food consumed at home and away from home also declined to 12.1% in January compared to 13.3 per cent in December. 
 
In addition, the 12 month index change for non-food products decreased to 9.3 per cent in January from 10.3 per cent recorded in December.
 
NBS said annual inflation excluding food and energy for the month of January decreased to 7.9 per cent from 8.9 per cent recorded in December.
 
Annual inflation for energy decreased to 17.4 per cent in January,   compared to 17.8 per cent recorded in December.
 
The purchasing power of the consumer's Tanzanian shilling measures the change in the value of consumer goods and services that a sum of Tanzanian shillings could buy at different periods, as the overall level of the Consumer Price Index (CPI) goes up.
 
The national statistics office explained further that the purchasing power of Sh.100 has been decreasing, declining to Sh. 72.33 from September 2010 to January 2013.
 
In other words the purchasing power using local currency has decreased by about 28 percent between September 2010 and January 2013. 
 
Price movement of different groups of commodities in the Consumer Price index from January 2012 to January 2013 was also registered. On average, the food and non-alcoholic beverages index and the energy and fuel index had higher upward trends over the period compared to other indices. 
 
Furthermore, energy and fuels portrayed unstable price movements compared to other indices. All items aside from food and all items outside food and energy showed more stable price movements.
SOURCE: THE GUARDIAN