Comprehensive Economic Overview & Analysis
Join TICGL as a ResearcherTanzania continues to demonstrate remarkable economic stability with low and controlled inflation. As of January 2026, the headline inflation rate stands at 3.3%, reflecting a moderate decrease from 3.6% recorded in December 2025. This positive trajectory underscores the effectiveness of Tanzania's monetary policy framework and macroeconomic management.
The Consumer Price Index (CPI) has risen from 117.57 in January 2025 to 121.41 in January 2026, representing a year-on-year increase of 3.3%. Tanzania's inflation has remained consistently below the 5% threshold since 2021, demonstrating strong price stability even amid global economic uncertainties.
Key Highlights:
Understanding Tanzania's inflation journey over the past five years provides crucial context for current economic conditions. The period from 2021 to 2026 has witnessed significant global economic events, including the COVID-19 recovery, the Russia-Ukraine conflict, and worldwide commodity price volatility. Tanzania has navigated these challenges with notable resilience.
| Year | Headline Inflation | Core Inflation | Non-Core Inflation | Food & Beverages | Energy/Fuel | Key Drivers |
|---|---|---|---|---|---|---|
| 2021 | 3.7% | 4.1% | 2.5% | ~3-4% | 3.1% | Transport, Food |
| 2022 | 4.3% | 3.0% | 8.2% | 7.3% | 9.1% | Global Commodity Shocks |
| 2023 | 3.8% | ~3.5% | ~2.2% | 2.1% | 9.3% | Easing Food Prices |
| 2024 | 3.1% | 3.4% | 2.2% | 2.1% | 9.3% | Continued Downward Trend |
| 2025 | 3.3% | 2.2% | 6.2% | 6.4% | 4.3% | Food Price Rebound |
| 2026 (Jan) | 3.3% | 2.2% | 6.0% | 5.7% | 4.6% | Stabilizing |
Inflation peaked at 4.3% in 2022 due to unprecedented global economic shocks, including supply chain disruptions, the Russia-Ukraine conflict, and soaring energy prices. However, Tanzania's proactive monetary policy and effective macroeconomic management led to a swift decline to 3.1% in 2024. The slight increase to 3.3% in 2025-2026 is primarily attributed to food price rebounds, while energy inflation has moderated significantly.
The year 2021 marked Tanzania's economic recovery from the COVID-19 pandemic. With headline inflation at 3.7%, the economy demonstrated resilience. Core inflation stood at 4.1%, slightly higher than the headline rate, indicating some underlying demand pressures. Transport and food sectors were the primary drivers during this period.
2022 witnessed the highest inflation rate in the five-year period at 4.3%, primarily driven by global commodity shocks following the Russia-Ukraine conflict. Energy/fuel inflation surged to 9.1%, while food inflation reached 7.3%. Non-core inflation spiked to 8.2%, reflecting the volatile nature of global commodity markets. Despite these challenges, Tanzania's inflation remained moderate compared to many global economies that experienced double-digit inflation.
The period from 2023 to 2024 marked a significant stabilization phase. Food inflation eased dramatically from 7.3% (2022) to just 2.1% (2023-2024), contributing to the overall decline in headline inflation to 3.1% by 2024. Core inflation remained stable around 3.4-3.5%, while energy/fuel inflation, though still elevated at 9.3%, represented a persistent challenge from global energy markets.
The most recent period shows food inflation rebounding to 6.4% (2025) and 5.7% (January 2026), likely due to weather patterns and agricultural production cycles. However, this has been offset by significant improvement in energy inflation (down to 4.3-4.6%) and exceptionally strong core inflation control at 2.2%, resulting in headline inflation remaining stable at 3.3%.
Core inflation at 2.2% is a critical indicator of effective monetary policy. Core inflation excludes volatile items like food and energy, measuring underlying price pressures in the economy. The current low core inflation demonstrates that the Bank of Tanzania's monetary policy has successfully controlled demand-driven inflation, even as certain categories like food experience temporary price increases.