In the fiscal year 2023/24, Tanzania successfully maintained its inflation rate within the national medium-term target of 3-5%, averaging 3.1%, a decrease from 4.6% in the previous year. However, regional disparities were evident: the Dar es Salaam Zone recorded the highest inflation at 5.4%, driven by rising non-food prices in categories such as housing and transport, while the Lake Zone enjoyed the lowest rate at 1.2%, reflecting the benefits of good harvests that reduced food prices significantly. Other regions displayed varying inflation levels, with the Northern Zone at 3.6%, the Central Zone at 2.5%, the South Eastern Zone at 2.4%, and the Southern Highlands Zone at 3.7%. This regional data underscores the critical role of agricultural performance in inflation control and highlights the need for targeted interventions in urban areas like Dar es Salaam to manage rising living costs effectively.

1. National Inflation:
   • Overall national inflation averaged 3.1% in 2023/24, a decrease from 4.6% in the previous year (2022/23).
2. Regional Inflation Rates:
   • Dar es Salaam Zone: Registered the highest inflation at 5.4%, up from 4.0% the previous year. This increase was driven by higher prices of non-food items, including clothing, footwear, housing, transport, and accommodation services.
   • Lake Zone: Experienced the lowest inflation rate of 1.2%, significantly down from 5.0% in 2022/23. This decrease was mainly due to lower food prices following good harvests.
   • Northern Zone: Inflation was 3.6%, slightly lower than the previous year’s 4.5%.
   • Central Zone: Recorded an inflation rate of 2.5%, down from 5.0% in 2022/23.
   • South Eastern Zone: Inflation eased to 2.4%, from 3.8% in 2022/23.
   • Southern Highlands Zone: Inflation was 3.7%, down from 5.0% the previous year.
3. Factors Influencing Inflation:
   • Decrease in Food Prices: Good harvests in the 2022/23 crop season led to reduced food prices in most zones, helping lower inflation rates.
   • Non-Food Price Increases: In Dar es Salaam, inflation pressures were higher due to rising costs in non-food categories, such as housing and transport.

The regional inflation from 2023/24 with insights about Tanzania’s economic dynamics:

1. Food Security and Inflation Control:
   • Lower inflation rates in most regions, particularly the Lake Zone (1.2%), indicate the positive impact of good harvests on food prices. This suggests that agriculture continues to play a central role in controlling inflation, as food prices significantly influence overall inflation rates in Tanzania.
2. Cost of Living Disparities:
   • Higher inflation in Dar es Salaam (5.4%) points to the growing cost of living in urban areas, where demand for non-food items—such as housing, transport, and services—is more pronounced. This urban inflation pressure suggests that Tanzania’s cities, especially Dar es Salaam, may require targeted interventions to stabilize costs in these sectors.
3. Dependence on Agriculture:
   • The decline in inflation in regions with strong agricultural production underscores the dependence of inflation control on agriculture. Tanzania’s reliance on food production for inflation management makes the economy sensitive to agricultural output and, by extension, climate variability. This highlights a need for diversification to reduce this vulnerability.
4. Challenges in Managing Non-Food Inflation:
   • Despite national inflation targets being met, the rise in non-food prices, particularly in Dar es Salaam, reflects challenges in areas like housing and transportation. Addressing these could involve infrastructure investments, better urban planning, and policies to stabilize these costs.
5. Uneven Economic Pressures:
   • The disparity in inflation rates across zones highlights uneven economic pressures and varying needs. While rural areas benefit from stable or falling food prices, urban areas face rising living costs, suggesting that policies may need to address regional inflation drivers more specifically.