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Tanzania inflation rises to 13.5 pct y/y in Dec

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by Invisible, Jan 16, 2009.

  1. Invisible

    Invisible Admin Staff Member

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    Jan 16, 2009
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    A jump in food prices in Tanzania pushed the east African country's inflation rate to 13.5 percent in December, although a global fall in oil prices helped lower energy costs, official data showed on Friday. Like neighbours Kenya and Uganda, Tanzania has been wrestling with double-digit inflation fuelled by a surge in commodity prices in 2008 and the government hopes recent declines in global prices will soon be passed on.

    While inflation rates are expected to slow this year, they pose a problem for policymakers at a time the region's economies are ratcheting down growth forecasts for 2009 on fears a global slowdown will hurt key commodity exports and tourism.

    Food prices in Tanzania, which make up 55.9 percent of the consumer price basket, rose 4.0 percent in December from a month earlier with increases for cereals, starch roots, vegetables, fruit, meat, fish, sugar, nuts and milk.

    The overall 2.3 percent month-on-month increase in consumer prices pushed the inflation rate in December to 13.5 percent, up from 12.3 percent a month earlier, the National Bureau of Statistics (NBS) said in a statement.

    "The increase in the rate of inflation was mainly attributed to the increase of food inflation of 18.6 percent for the year ended December from 16.3 percent that was registered for the year ended November," it said.

    Only two of the index components -- transportation and fuel, power and water -- fell from November. The main fallers were diesel, petrol and kerosene which dropped 9.2 percent, 1.9 percent and 11.4 percent respectively, the NSB said.

    Excluding food, Tanzania's inflation rate in December fell to 5.9 percent from 6.3 percent in November. The average annual inflation rate for 2008 came in at 10.3 percent, or 6.7 percent excluding food.

    Tanzania's year-on-year inflation rate moved into double digits in September for the first time in nearly a decade.

    In neighbouring Kenya, the region's biggest economy, the headline rate was 27.7 percent in December with food prices 37.5 percent higher than a year earlier.

    Kenya, however, also saw double-digit monthly declines for diesel, petrol and paraffin.


    Inflation in Uganda was running at 14.2 percent in December, also thanks to higher food prices.

    Tanzania's monetary policy targets an inflation rate of 5 percent in the medium term.

    The finance ministry said in December it had raised its forecast for June 2009 to 6.8 percent from 5.3 percent because it was taking longer than expected for commodity price falls to be passed on. Tanzania's fiscal year runs from July to June.

    Tanzania's national consumer price index covers market prices of 207 items collected in 20 towns in mainland Tanzania.




    Source:

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  2. Susuviri

    Susuviri JF-Expert Member

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    Jan 17, 2009
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    Despite the fact that this thread appears to be uncommented, however it contains vital information about the state of economy of Tanzania. I guess the National Statistics Bureau quoted here is the local ie Tanzanian one, in which I do not have much faith as they are known to massage figures. So I believe that the situation is more dire than the official news.

    To have double digit inflation for the first time in a decade is serious business and nobody is talking about this. The increase of food prices should be actually good news for Tanzania which can become the food basket of Africa with all its fertile land. It is a shame that our agricultural sector has been neglected so much so that we are dependant on food imports. Shameful! shameful!
     
  3. Augustine Moshi

    Augustine Moshi JF-Expert Member

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    Ulipofuka moshi mweupe kule Dodoma, nilitabiri kwamba JK angetufikisha kwenye headline inflation rate ya 20% kabla hajamaliza kipindi cha miaka mitano.

    I think I was overly optimistic. We will be lucky not to be looking at that 20% inflation rate before this year is out.
     
  4. Susuviri

    Susuviri JF-Expert Member

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    I keep my fingers crossed because apart from superstition I don't see anything better coming out of the remaining 2 years before elections 2010.

    Globally we are screwed and we have not done anything to ease the pain, which only means the global economic crisis will hurt twice as much!

    Leadership that we lack is the ability of our leaders to have foresight. We need to keep focused on the figures and facts and put aside populism. We need pragmatic leaders.
     
  5. Nyambala

    Nyambala JF-Expert Member

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    Halafu bado kuna watu wanataka kutuaminisha kwamba serikali ya awamu ya nne inafanya mambo makubwa na imeleta maendeleo, subirini mwakani mtasomewa statistics za kufa mtu kuonesha ni namna gani serikali imetekeleza majukumu yake
     
  6. k

    kela72 Senior Member

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    Eti yote haya yalisababishwa na uongozi mbovu wa serikari ya awmu ya tatu!!
    Wahenga walisema "mmbaazi ukikosa maua, husingizia jua"
     
  7. B

    Bull JF-Expert Member

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    All periods of economic growth will have a degree of inflation, 13% inflation is a sign that an economy is growing. As we have seen from Japan's 14 year experience from 2000 to only recently, as you can see, it's not so easy to label inflation as either good or bad - it depends on the overall economy as well as your personal situation.

    Despite the world economy crisis, under JK, TZ still doing better compare to other east africa countires where inflation up to 37%

    The lack of inflation may be an indication that the economy is weakening, deflation can be bad too, with no jobs and low GDP growth
     
  8. M

    MgonjwaUkimwi JF-Expert Member

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    I don't know a situation in which inflation is good for economy. Please educate. All I know is that when the economy is growing has an inflationary impact (overcrowding effects in general equilibrium mode). In this case, inflation is neither a cause nor a good sign of economic growth but undiserable effects of economic growth.
     
    Last edited: Jan 18, 2009
  9. bm21

    bm21 JF-Expert Member

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    U might be right but may be that applies to a certain level of economic gross. However, for a case of Tanzania utterly, a rise of inflation level to 13.5 (of course I'm sure is more than this 'financial engineering') is an indication that the economy is not well performing. Basically, inflation has both positive and negative economic impacts, for instance higher inflation rates has positive impact to exporters 'business men' while is disadvantageous to importers as it raises prices thus products or commodities may fetch less domestic demand especially if they 're not necessary good or elastic goods.

    For a case of Tanzania, I know we're basically importing almost everything. Our main export is basically primary raw goods with no value added. These exports are however insignificant to take advantage of the economic fall due to the fact that prices for the same are externally set/determined and the fact that they are highly perishable thus room for negotiation is limited.

    On the other hand is very shame that food items significantly contributed to escalating inflation in Tanzania. Simply one can judge that there is something wrong with our domestic policies on traditional sector (Agriculture). However, if you look at it critically you'll find yourself circling around vicious circle 'Corrupt election, corrupt leaders, corrupt citizens, fake reports 'polished', polished policies, nonsense strategies and thus freak national strategic plan and annual plans'.

    Is very sad since the first national annual plan and budget for the 4th government targets for inflation rates have been contrary to the strategies set to achieve the same as such the same have never been realized but rather an opposite gross rate by very far such that is not and error in engineering is 'blunder'. Similarly, they have targeted inflation to be 6.8 by June 2009. This is revised target, what 're the strategies to achieve this? basically it will even go higher than the current lever 13.5%. I guess these people are just coming up with presentable numbers without critically looking at how to redress the same 'sure we'll remember the late Balali and Hon. Mkapa despite his wrong doing'.

    For sake of the cote above, always is good to benchmark with others but benchmarking always should be to best practice not just because is East africa. Either the structure of the economy between East African countries are never the same.

    ''There 're a lot to be done with our country currently even ministries are producing two or more reports depending on where is to be presented like Indian Traders in Dar trying to avoid paying tax, shit''
     
  10. Lole Gwakisa

    Lole Gwakisa JF-Expert Member

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    Wadau THIS IS SERIOUS! We are going back to the hela ya madafu land.
    At an inflation of 13.5% ina maana kila hela ya Tshs 100 baada ya muda mfupi inapoteza thamani na inakuwa Tshs 86.5
    Wachumi tushaurini ili kuinusuru hela ya mfukoni tufanye nini, nunua dhahabu, Tanzanite auwekeza kwenye commodity ipi kwa sasa?
     
  11. Sita Sita

    Sita Sita JF-Expert Member

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    Why is it so Hard to control inflation in Tanzania???
    Hivi tukipata Financial Crisis tutapona kweli!!

    I think we need to let that NBS be an independent institution. We need reliable data, real solutions and attainable targets.

    They should tell us where the problem is and how to solve it as a nation in large because inflation affects everyone of us.

    High food prices shoots inflation to a double digit percent. Yet we say that most of our citizens are employed in the Agriculture sector. So what are they producing?? We should be talking about low food prices in Tanzania. We got labor, land and good polcies, thats enough.
     
  12. Augustine Moshi

    Augustine Moshi JF-Expert Member

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    It is not too hard to control inflation in Tanzania. It has been done before, and without too much pain. We had an inflation rate of 30% in 1995. This was gradually lowered to 4.5% by 2005.

    It is bad leadership that is increasing inflationary pressure on our economy. We can do something about it. We need to throw out the inept people in power and replace them with a more capable group.
     
  13. B

    Bull JF-Expert Member

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    inflation mainly 2 type. 1. cost push 2. demand push
    the first one is bad for economy and second one is better (demand push) as it shows increase in price of goods due to excess demand.
    for the first one cost push due to increase in the cost of production (land , labor, capital) price of goods is increasing. so it does not push the demand just increase the price of the goods which in long term leads to depression
     
  14. T

    Tikerra JF-Expert Member

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    The 13.5% rate was offered by BoT(the "status quo"),in there attempt to show that things aren't so bad after all! Why should we believe the figure,especially given the history of our leadership.Look here,prices are just too high and unbearable for a very normal citizen.Compared to last year's prices,prices for some commodities have gone up by more than 200%!How then can the inflation rate remain at only 13.5%.No!No!There is just no truth in that unless they tell us what figures they used in the calculation.To me it could be even more than 50%!

     
  15. SYLLOGIST!

    SYLLOGIST! JF-Expert Member

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    Jan 23, 2009
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    Purchasing Power Parity?




    "The Quantity of money circulation has risen faster than the stock of goods and services."

    People are spending more, apparently in US$(finance ministry working on this),the demand is high.

    It might be a good sign-Remember just recently the Govt announced building of roads and other infrustructures- This is public expenditure. There has not been any significant tax increase for this, hence, maybe, the Govt printed more money!

    Capital flight? There is an on-going problem of using the $$$$ for business transaction, this also might have an adverse effect.

    However this can only be addressed only by the Govt/Central Bank.

    Only time and prompt Govt/Central bank intervention that, shall, steer the condition to near equilibrium.

    source:M. Friedman, Studies in the quantity Theory of Money
     
  16. SYLLOGIST!

    SYLLOGIST! JF-Expert Member

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    Tikerra,
    Try this!
    i=r+I

    i-interest rate
    r-rate of interest
    I-13.5%

    source:Taylor "The Economics of Exchange rates"
     
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