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Inflation on decline-Meghji
2007-05-25 09:00:50
By Pastory Nguvu
The inflation rate, which reached 7.3 per cent in February, has begun to slide back and now stands at 6.1 per cent, the government announced yesterday.
Minister for Finance Zakia Meghji said it was hoped that the inflation would decline further in the coming months as food prices fell.
She was speaking at Public Expenditure Review Annual Consultation meeting held in Dar es Salaam yesterday.
Meghji said the government was examining further ways of increasing revenue collection, particularly non-tax income.
`Although the Public Expenditure and Financial Accountability Review Report acknowledges good performance on domestic revenue collection, there is still a shortage of financing needs for the National Strategy for Growth and Reduction of Poverty (MKUKUTA)`, she said.
The minister said Tanzania had achieved strong growth and low inflation through sound macroeconomic policies.
She said that real GDP had been growing at an annual average rate of 5.8 per cent while inflation had for most of the period been contained at below five percent.
The minister said that most recent accounts showed that the GDP in 2006 rose by 6.2 per cent.
She said inflation had risen recently due to rising prices of some food and non-food items spurred by drought and higher distribution costs, following an increase in the price of petroleum products.
Speaking on the government’s 2006/2007 budget, Meghji said:`The government`s budget for 2006/2007 has generally been implemented successfully, despite disruption caused by the energy crisis, food shortage and other external factors.
Domestic revenue collection has been well in excess of the budget target.
The good performance reflects the robust economic performance, and tax policy and administration reforms at the TRA in the context of TRA`s Second Corporate Plan.`
Commenting on information gaps and accountability issues Usu Malya, the Executive Director Civil Society Organizations (CSO), said that the status of report 2006 raised many valid points and recommendations.
However, she said the status depended mainly on data generated through indicators for three clusters of MKUKUTA-which in turn depended on official statistics and information provided by government department.
`As noted in the report, there is a major gap in provision of information, especially from the Local Government Authorities, which reduces capacity to monitor MKUKUTA implementation,` she said.
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