Free falling oil prices check inflation rate at 4 per cent

Free falling oil prices check inflation rate at 4 per cent

National Bureau of Statistics

A big slump in pump prices continued to push the brakes on the country’s inflation last month, slowing the annual headline rate to four per cent as it offset rising costs of other commodities.

 

The National Bureau of Statistics last month’s report released yesterday in Dar es Salaam noticed the slowdown amid the ongoing big drop of crude oil prices in the world market.

 

According to the bureau the price of goods and beverages also were relatively slower compared to a month earlier.

As a result, the national inflation rate for the month of January this year decreased further to 4.0 per cent compared to 4.8 per cent recorded in December last year.

 

With oil prices falling even deeper in December to at least US$56 per barrel from US$100, a senior official at the Bank of Tanzania (BoT) Johnson Nyela predicted an even superior slowdown in month’s headline inflation rate interpretations.

 

Nyela did not go further into details, but maintained that there several factors that the central bank was undertaking to implement fiscal policy and control inflation.

 

But, Ephraim Kwesigabo, NBS Director for Population Census and Social Statistics releasing last month’s headline interpretation at a press conference in Dar es Salaam warned that the annual headline inflation rate is likely to surge due to indicators of expected change in the oil prices at the international market.

 

According the director, authorities’ need to control monetary policies and increase production to achieve slower inflation rate.

 

“Amid a continued drop in the annual headline inflation, a marginal increase of oil prices coupled with increased import products is likely to affect this improvement,” he said.

 

The national statistics reading registered an overall index going up to 152.43 in January from 146.60 recorded in January 2014. 

 

Kwesigabo said food and non alcoholic beverages inflation rate has decreased to 4.9 per cent from 5.7 per cent recorded in December last year.

Looking across the country, consumer prices induced trend for goods and services has slightly increased following a subsequent increase of prices of both food and non food items.

 

Items which contributed to such increase include rice 1.2 per cent, meat 3.4 per cent, fish 2.0 per cent, baby food excluding milk 2.2 per cent and vegetable 3.6 per cent.

 

Non food items include garments for women by 2.0 per cent, actual rental paid by tenants by 2.4 per cent and charcoal contributed by 1.6 per cent.

Annual headline inflation for the period under review in Uganda and Kenya decreased to 1.3 per cent from 1.8 per cent and to 5.53 per cent from 6.02 per cent respectively. 

SOURCE: THE GUARDIAN