Tanzanian inflation maintained its downward trend in the year to March, helped by a slowdown in the rise of food prices, and fell into single digits for the first time since May, 2011, official data showed on Monday.
Consumer prices in east Africa's second biggest economy rose 0.5 percent during March compared with 1.4 percent a month earlier, helping slow the year-on-year inflation rate to 9.8 percent from 10.4 percent.
"The decline of the inflation rate to single digit levels is attributed to a series of government measures aimed at tackling rising consumer prices, which included lowering the prices of key food items such as rice," Ephraim Kwesigabo, a director at the National Bureau of Standards (NBS) told reporters.
High food and energy prices sent Tanzanian inflation surging into double digits in 2011, as also happened in neighbouring Kenya and Uganda, piling pressure on the local currency and forcing a sharp tightening of monetary policy.
Inflation peaked at 19.8 percent in December, 2011, and then began slowing as policy changes filtered through the economy. But the central bank is still intervening in the currency market to fight a depreciation of the Tanzanian shilling, which, if sustained, could pose upside inflationary risks.
Underscoring the danger, energy prices increased 22.6 percent over the 12-month period to March compared with 18.3 percent in February.
