1. METHODOLOGICAL NOTE
1.1 Definition
The NCPI measure changes over time in the cost of a fixed basket of goods and services that are purchased by a representative sample of households in Tanzania.
Currently, the NCPI basket comprises of 383 goods and services, of which 132 are Food and Non-Alcoholic Beverages and 251 are Non-Food items.
With regard to geographical coverage, the NCPI uses price data collected from all 26 regional headquarters in Tanzania Mainland.
1.2 Weights and a Reference Period
The NCPI weights are based on monetary expenditures relating to consumption of all households in 26 regions of Tanzania Mainland. The index weights are based on expenditures of both urban and rural households derived from 2017/18 Household Budget Survey.
The reference period for base prices is the average of January to December, 2020 and the index reference period is year 2020.
1.3 Classification
The NCPI uses the UN Classification of Individual Consumption by Purpose, 2018 (UN COICOP, 2018) and is being disseminated using 13 COICOP. In addition, the rebased NCPI is disseminated together with several additional index aggregations which includes: - Core index; Energy, fuel and utilities; Non core index; services index; Goods index; Education services and products ancillary to education index and All items less food and non-alcoholic beverages.
1.4 Elementary and Higher-Level Indices
Compilation of the NCPI use geometric mean of price relatives for compiling elementary index aggregates and the Lowe Index formula (which is Laspeyres index formula type) is used for computing higher level aggregates.
2. ANNUAL HEADLINE INFLATION FOR JUNE, 2022 INCREASED TO 4.4%
Table 1: Changes in the NCPI for June 2022, (2020 = 100)
Other Selected Groups
2.1 Headline Inflation Rate
The Headline Inflation Rate measures inflation when all items in the fixed CPI basket are included.Table number 1 above indicates that, Annual Headline Inflation Rate for the month of June, 2022 has increased to 4.4% from 4.0% recorded in May, 2022.
The increase of headline inflation explains that, the speed of price change for commodities for the year ended June, 2022 has increased compared to the speed recorded for the year ended May, 2022. The overall index went up from 104.30 recorded in June, 2021 to 108.93 in June, 2022.
2.2 Food and Non-Alcoholic Beverages Inflation Rates
Food and Non-Alcoholic Beverages Inflation Rate for June, 2022 has increased to 5.9% from 5.5% recorded in May, 2022. On the other hand, Annual Inflation Rate for all items without Food and Non-Alcoholic Beverages for June, 2022 has also increased to 3.9% from 3.4% recorded in May, 2022.
2.3 Core Inflation Rates
Core Index excludes items with volatile prices, that is unprocessed food; energy and utilities.
Exclusion of volatile prices from the total NCPI provides a more stable Inflation Rate for Policy Makers. The Core Index covers 297 items and the share of weight to total NCPI weight is 73.9%.
The inflation rate for Core Index in June, 2022 has increased to 3.4% from 3.0% recorded in May,2022.
Chart 1: Movement of National Consumer Price Indices (NCPI) and Inflation Rates from June, 2021 –June, 2022. (2020 = 100)
Chart 1 indicates that; NCPI has shown a relatively stable price movement from June, 2021 to June, 2022. In addition, Annual Headline Inflation Rates shows a stable trend over the period (June 2021 to June, 2022) ranging from 3.6% (June, 2021 & March, 2022) and 4.4% in June, 2022.
3. MONTHLY CONSUMER PRICE INDEX BETWEEN MAY AND JUNE, 2022
The National Consumer Price Index between May and June, 2022 has increased from 108.42 recorded in May, 2022 to 108.93 recorded in June, 2022.
The increase of the overall index is attributed to price increase for some food and non-food items. Some food items that contributed to an increase of the index include: - wheat grains by 0.9%, rice by 1.3%, maize grains by 5.4%, wheat flour by 1.2%, maize flour by 6.4%, vegetables by 1.1%, round potatoes by 10.2%, fresh cassava by 6.3%, cocoyam by 7.3%, dried beans by 0.9%, cassava flour by 4.6% and soft drinks (soda) by 0.7%. On the other hand, some non-food items that contributed to an increase of the index include: - cement by 0.5%, corrugated iron sheets by 8.1%, Liquefied hydrocarbons (gas) by 6.3%, kerosene by 5.7%, laundry bar soap by 2.2%, laundry powdered soap by 7.2%, bus fare by 4.2%, transport of individuals by taxi by 3.6% and motorcycle fare (Bodaboda) by 5.6%.
Table 2: NCPI Release Schedule for the Coming Months
