Regional Performance, Investment Implications & Economic Projections
Tanzania demonstrated superior inflation management in 2025, achieving an annual average of 3.3% and outperforming regional peers Kenya (4.1%) and Uganda (3.6%). Despite food inflation surging from 2.1% to 6.4%, the country maintained exceptional stability through declining core inflation (3.4% to 2.2%) and non-food inflation (3.5% to 2.0%).
| Month | Tanzania (%) | Kenya (%) | Uganda (%) | Best Performer |
|---|---|---|---|---|
| Jan 2025 | 3.1 | 3.3 | 3.6 | Tanzania |
| Feb 2025 | 3.2 | 3.5 | 3.7 | Tanzania |
| Mar 2025 | 3.3 | 3.6 | 3.4 | Uganda |
| Apr 2025 | 3.2 | 4.1 | 3.5 | Tanzania |
| May 2025 | 3.2 | 3.8 | 3.8 | Tanzania |
| Jun 2025 | 3.3 | 3.8 | 3.9 | Tanzania |
| Jul 2025 | 3.3 | 4.1 | 3.8 | Tanzania |
| Aug 2025 | 3.4 | 4.5 | 3.8 | Tanzania |
| Sep 2025 | 3.4 | 4.6 | 4.0 | Tanzania |
| Oct 2025 | 3.5 | 4.6 | 3.4 | Uganda |
| Nov 2025 | 3.4 | 4.5 | 3.1 | Uganda |
| Dec 2025 | 3.6 | 4.5 | 3.1 | Uganda |
| Annual Average | 3.3 | 4.1 | 3.6 | Tanzania |
| Category | Weight (%) | 12-Month Change (%) | Status |
|---|---|---|---|
| Food & Non-alcoholic Beverages | 28.2 | 6.7 | ⚠️ High Pressure |
| Alcoholic Beverages & Tobacco | 1.9 | 3.4 | Moderate |
| Clothing & Footwear | 10.8 | 2.0 | ✅ Well-controlled |
| Housing, Water, Utilities | 15.1 | 2.3 | ✅ Stable |
| Furnishings & Household | 7.9 | 3.0 | Moderate |
| Health | 2.5 | 1.3 | ✅ Excellent |
| Transport | 14.1 | 4.1 | Elevated |
| Information & Communication | 5.4 | 0.5 | ✅ Minimal |
| Recreation & Culture | 1.6 | 0.3 | ✅ Minimal |
| Education Services | 2.0 | 2.9 | Moderate |
| Restaurants & Accommodation | 6.6 | 0.9 | ✅ Low |
| Core Inflation | 73.9 | 2.5 | ✅ Strong Control |
| Non-Core Inflation | 26.1 | 6.7 | ⚠️ Volatile |
| TOTAL - ALL ITEMS | 100.0 | 3.6 | Target Range |
| Category | 2024 Average (%) | 2025 Average (%) | Change (pp) | Trend |
|---|---|---|---|---|
| Headline Inflation | 3.1 | 3.3 | +0.2 | ↗️ Slight increase |
| Food Inflation | 2.1 | 6.4 | +4.3 | ⚠️ Sharp increase |
| Non-Food Inflation | 3.5 | 2.0 | -1.5 | ✅ Strong decline |
| Core Inflation | 3.4 | 2.2 | -1.2 | ✅ Significant improvement |
| Non-Core Inflation | 2.2 | 6.2 | +4.0 | ⚠️ Major increase |
| Factor | Tanzania | Kenya | Uganda | Tanzania Advantage |
|---|---|---|---|---|
| 2025 Average Inflation | 3.3% | 4.1% | 3.6% | ✅ Lowest |
| Stability (Std Dev) | ~0.15 | ~0.53 | ~0.29 | ✅ Most stable |
| Core Inflation | 2.2% | N/A | N/A | ✅ Well-controlled |
| Months as Best Performer | 8/12 | 0/12 | 4/12 | ✅ Clear leader |
| Purchasing Power | Best | Worst | Middle | ✅ Investment appeal |
| Country | Baseline Forecast (%) | Range (%) | Key Sources |
|---|---|---|---|
| Tanzania | 3.8 | 3.0 - 4.2 | BoT, Trading Economics, TICGL |
| Kenya | 4.8 | 4.0 - 5.2 | IMF (5.2%), World Bank (5.0%) |
| Uganda | 3.7 | 3.3 - 4.2 | Trading Economics, Deloitte/EIU |
| Quarter | Projected Inflation (%) | Expected Trend |
|---|---|---|
| Q1 2026 | 2.7 | Below 2025 average |
| Q2 2026 | 3.1 | Gradual increase |
| Q3 2026 | 2.7 | Stabilization |
| Q4 2026 | 2.9 | Year-end stability |
| 2026 Average | ~2.9 | Below 2025 |
| Indicator | Current Status | 2026 Target | Policy Stance |
|---|---|---|---|
| Policy Rate | 5.75% | Maintained | Accommodative |
| Inflation Target | 3-5% | 3-5% | On target |
| GDP Growth | 5.5-6.0% | 5.5-6.0% | Supportive |
| Foreign Reserves | Improving | Stable | Positive |
Inflation Range: 3.0 - 3.5% | GDP Impact: 6.0%+ growth
Key Drivers: Good rainfall patterns, stable food supply, global commodity price moderation, continued strong monetary policy management.
Inflation Range: 3.5 - 4.2% | GDP Impact: 5.5-6.0% growth
Key Drivers: Normal weather conditions, Bank of Tanzania targets met, regional stability maintained, accommodative monetary policy continues.
Inflation Range: 4.5 - 6.0% | GDP Impact: 4.5-5.0% growth
Key Drivers: Drought conditions, political tensions related to potential elections, global economic shocks, currency depreciation pressures.
| Risk Factor | Impact on Inflation | Probability | Potential Addition (pp) |
|---|---|---|---|
| Drought/Agricultural Shock | Food prices surge | Medium | +1.0 to +1.5 |
| Political Instability (Elections) | Supply disruptions | Low-Medium | +0.5 to +1.0 |
| Global Oil Price Spike | Transport, energy costs | Medium | +0.5 to +0.8 |
| Currency Depreciation | Import prices | Low | +0.3 to +0.5 |
| Regional Food Shortages | Cross-border food prices | Medium | +0.5 to +1.0 |
| Climate Events (El Niño) | Agricultural production | Medium-High | +1.0 to +2.0 |
| Category | Indicators to Monitor | Impact Channel | Priority |
|---|---|---|---|
| Agriculture | Rainfall patterns, crop yields, livestock health | Direct food prices (28.2% of CPI) | Critical |
| Energy | Global oil prices, diesel/petrol local pricing | Transport (14.1%), utilities (5.7%) | High |
| Currency | TZS/USD exchange rate, foreign reserves | Import prices, goods inflation | High |
| Regional | EAC inflation trends, cross-border trade | Food supply, competitive pressures | Medium-High |
| Policy | BoT rate decisions, fiscal policy | Interest rates, demand-side | Medium |
| Political | Election preparations, stability | Supply chains, investor confidence | Medium |
Data Sources: National Bureau of Statistics Tanzania (NBS), Bank of Tanzania (BoT), Trading Economics, International Monetary Fund (IMF), World Bank, Tanzania Investment and Consultant Group Limited (TICGL), Deloitte/Economist Intelligence Unit (EIU)
Next Update: January 2026 NCPI Release - February 9, 2026