The Bank of Tanzania (BoT) is bracing for more inflation in the coming months, after latest data showed that inflation increased in both May and June.
Data from the Tanzania NBS (National Bureau of Statistics) indicates that inflation has been rising since March 2022 as follows:
March 2022 (3.6%)
April 2022 (3.8%)
May 2022 (4%)
June 2022 (4.4%)
The June 2022 rate is the most recent inflation data from Tanzania.
The Monetary Policy Committee (MPC) noted that inflation still remained within the target range of 3-5% on the mainland and 5% for Zanzibar.
“Inflation increased in May and June 2022, attributable to persistent high prices of imports, but remained within the target of 3-5 percent for Tanzania Mainland and 5 percent for Zanzibar. However, high food, energy, and fertilizer prices in the world market pose an upward risk to future inflation.”
While the country’s inflation is among the lowest, BoT indicated that it was faced with rising inflationary pressures from high import prices which impaired fast growth of the economy.
The central bank nevertheless said it ‘was pleased with the conduct of monetary policy, which maintained adequate liquidity in banks for lending to the private sector.’
However, several factors that are undermining growth in Tanzania, one of Africa’s largest economies, were highlighted, and included:
The effects of the war in Ukraine
A resurgence of the COVID-19 pandemic in China
Rising inflation, and
Tighter financial conditions
Due to rising inflationary pressure, the MPC said it had approved the Bank of Tanzania to ‘reduce the speed of expanding liquidity in the remainder of 2022, in order to tame inflationary pressures from the demand side, while safeguarding the growth of the economy.’