Tanzania’s inflation in March 2025, as detailed in the April 2025 Monthly Economic Review, shows an upward trend in headline inflation, driven primarily by rising food and energy prices, while core inflation has declined. Below, we outline the current inflation trends and their drivers, using specific figures from the document to provide clarity.

Headline Inflation Trend

Figure: Headline inflation rose to 3.3% in March 2025, up from 3.0% in March 2024.

Explanation:

• Trend: The 0.3 percentage point increase indicates a moderate upward trend in overall price levels, but inflation remains within national targets and regional benchmarks of the East African Community (EAC) and Southern African Development Community (SADC).
• Drivers: The document attributes this rise primarily to increases in food and energy prices (Page 3). These components have exerted significant upward pressure on the Consumer Price Index (CPI), which is based on a 2020=100 index.
• Context: Despite the increase, headline inflation is relatively stable, supported by the Bank of Tanzania’s monetary policy, which maintains the Central Bank Rate at 6% to keep inflation expectations below the 5% medium-term target.

Food Inflation Trend

Figure: Food inflation surged to 5.4% in March 2025, up from 1.4% in March 2024.

Explanation:

• Trend: The sharp 4.0 percentage point increase reflects significant price pressures in the food sector, which has a CPI weight of 26.1%.
• Drivers: Higher prices for staple crops—maize, rice, and beans—are the primary drivers, amplified by logistical challenges in transportation due to seasonal heavy rains. These rains disrupted supply chains, increasing costs for producers and traders.
• Mitigation: The National Food Reserve Agency (NFRA) held 587,062 tonnes of food stocks (mainly maize and paddy) and released 32,598 tonnes to local traders by March 2025, which helped mitigate further price spikes. The overall food supply remained adequate, preventing even higher inflation.
• Impact: The document notes that unprocessed food inflation’s contribution to overall inflation has increased, making it a key driver of the 3.3% headline rate.

Core Inflation Trend

Figure: Core inflation decreased to 2.2% in March 2025 from 3.9% in March 2024.

Explanation:

• Trend: The 1.7 percentage point decline indicates easing price pressures from non-food items, which constitute 73.9% of the CPI basket.
• Drivers: Core inflation excludes volatile items like food, energy, and utilities. The reduction suggests stable or declining prices for services and non-food goods, reflecting lower underlying inflationary pressures.
• Impact: The document highlights that core inflation’s contribution to overall inflation has gradually diminished, with unprocessed food inflation taking a larger role. This decline helps moderate the headline inflation rate despite food and energy spikes.

Energy, Fuel, and Utilities Inflation Trend

Figure: Energy, fuel, and utilities inflation increased to 7.9% in March 2025 from 6.6% in March 2024.

Explanation:

• Trend: The 1.3 percentage point rise makes this the highest inflation component, with a CPI weight of 5.7%.
• Drivers: The increase is primarily due to rising prices of petroleum products and wood charcoal, the latter linked to scarcity following seasonal rains (Page 5). The document notes the weight of wood charcoal in the energy component but does not quantify it.
• Impact: High energy inflation significantly contributes to the 3.3% headline rate, as energy costs affect transportation, production, and household expenses, amplifying overall price pressures.

Additional Context and Drivers

• Global Commodity Prices: Rising global fertilizer prices (up 2% to USD 615.13 per tonne) increase agricultural input costs, indirectly contributing to food inflation by raising production expenses. Conversely, a 4% drop in crude oil prices to USD 70.70 per barrel may have tempered energy inflation slightly, though domestic petroleum price hikes dominated.
• Monetary Policy: The Bank of Tanzania’s stable Central Bank Rate (6%) and adequate liquidity management (no reverse repo auctions) help anchor inflation expectations, preventing runaway price increases despite food and energy pressures.
• CPI Dynamics: The CPI weights show food (26.1%) and energy (5.7%) as smaller shares compared to core items (73.9%), but their volatility gives them outsized impacts on headline inflation. Month-on-month data shows food inflation at 2.5% and energy at 2.9% for March 2025, reinforcing their role as key drivers.

Conclusion

In March 2025, Tanzania’s headline inflation rose to 3.3% (from 3.0% in 2024), driven by surging food inflation (5.4%, up from 1.4%) and energy, fuel, and utilities inflation (7.9%, up from 6.6%). Food price increases, fueled by maize, rice, and bean costs and rain-related logistical challenges, and energy price hikes, driven by petroleum and wood charcoal, are the primary drivers. Core inflation’s decline to 2.2% (from 3.9%) moderate’s overall pressures, but unprocessed food’s growing contribution underscores its significance. The NFRA’s 587,062-tonne food stock and 32,598-tonne release helped contain food inflation, keeping headline inflation within EAC and SADC benchmarks.

Key Figures: Tanzania’s Inflation Trends and Drivers (March 2025)

Notes:

• All inflation figures reflect March 2025 unless stated otherwise.
• Food inflation driven by maize, rice, bean prices, and logistical issues from rains.
• Energy inflation driven by petroleum and wood charcoal price hikes.
• Source refer to the April 2025 Monthly Economic Review.

Tanzania’s food inflation is a significant component of its overall inflationary pressures, as detailed in the April 2025 Monthly Economic Review. Below, we compare food inflation with other key inflation components—headline, core, and energy, fuel, and utilities inflation—using specific figures from the document to highlight their relative levels, trends, and drivers.

Food Inflation

Figure: Food inflation was 5.4% in March 2025, up significantly from 1.4% in March 2024.

Explanation:

• Drivers: The increase was primarily due to higher prices for staple crops like maize, rice, and beans, exacerbated by logistical challenges in transportation caused by seasonal heavy rains. These disruptions increased supply chain costs, pushing food prices higher.
• Mitigation: The National Food Reserve Agency (NFRA) held 587,062 tonnes of food stocks (mainly maize and paddy) and released 32,598 tonnes to local traders by March 2025, which helped mitigate further price spikes.
• Context: Despite the rise, the overall food supply remained adequate, and food inflation’s contribution to overall inflation has grown, particularly from unprocessed food.

Headline Inflation

Figure: Headline inflation was 3.3% in March 2025, up from 3.0% in March 2024.

Explanation:

• Comparison: Food inflation (5.4%) is notably higher than headline inflation (3.3%), indicating that food prices are a major driver of overall price increases. The document notes that headline inflation’s rise was largely attributed to increases in food and energy prices.
• Context: Headline inflation includes all components of the Consumer Price Index (CPI), such as food, energy, and non-food items. Despite the uptick, it remains within national targets and regional benchmarks of the East African Community (EAC) and Southern African Development Community (SADC).
• Relative Impact: The higher food inflation rate suggests that food prices are pulling headline inflation upward, though other components moderate the overall rate.

Core Inflation

Figure: Core inflation decreased to 2.2% in March 2025 from 3.9% in March 2024.

Explanation:

• Comparison: Food inflation (5.4%) is more than double core inflation (2.2%), highlighting a stark contrast. Core inflation, which excludes volatile items like food, energy, and utilities, reflects underlying price pressures from non-food items.
• Trend: The decline in core inflation indicates reduced pressure from non-food items, such as services and goods excluding food and energy. The document notes that core inflation’s contribution to overall inflation has diminished, with unprocessed food inflation taking a larger role.
• Context: The lower core inflation rate helps keep headline inflation in check, but the high food inflation underscores the volatility of food prices compared to more stable non-food components.

Energy, Fuel, and Utilities Inflation

Figure: Energy, fuel, and utilities inflation increased to 7.9% in March 2025 from 6.6% in March 2024.

Explanation:

• Comparison: Energy, fuel, and utilities inflation (7.9%) is the highest among the components, surpassing food inflation (5.4%). This category saw the largest year-on-year increase, driven by rising prices of petroleum products and wood charcoal, the latter linked to scarcity following seasonal rains.
• Context: The document highlights that petroleum and wood charcoal price hikes were significant contributors. The weight of wood charcoal in the energy component of the CPI basket is noted but not quantified.
• Relative Impact: Energy inflation’s high rate amplifies overall price pressures more than food inflation, though both are key drivers of the 3.3% headline inflation.

Contribution to Overall Inflation

Figure: Unprocessed food inflation’s contribution to overall inflation has increased, while core inflation’s contribution has gradually diminished.

Explanation:

• Trend: The document indicates a shift in inflation dynamics, with unprocessed food (part of food inflation) becoming a more significant driver of headline inflation compared to core inflation. This is evident from food inflation’s high rate (5.4%) versus core inflation’s decline (2.2%).
• Impact: Food and energy inflation (7.9%) together exert stronger upward pressure on headline inflation (3.3%) than core inflation, reflecting the volatility of these components. The NFRA’s release of 32,598 tonnes of food stocks helped temper food inflation’s impact.
• Data Insight: The CPI weights show food and non-alcoholic beverages at 26.1% of the basket, energy, fuel, and utilities at 5.7%, and core items at 73.9%, suggesting food and energy have disproportionate impacts relative to their weights due to their volatility.

Conclusion

In March 2025, Tanzania’s food inflation (5.4%) is significantly higher than headline inflation (3.3%) and core inflation (2.2%) but lower than energy, fuel, and utilities inflation (7.9%). Food inflation, driven by maize, rice, and bean price hikes due to rain-related logistical issues, is a key contributor to overall inflation, alongside energy. Core inflation’s decline reflects easing non-food pressures, but the high food and energy rates highlight their volatility and impact on household costs. The NFRA’s 587,062-tonne food stock and 32,598-tonne release helped mitigate food inflation, keeping headline inflation within national and regional targets.

Key Figures: Tanzania’s Food Inflation vs. Other Inflation Components (March 2025)

Notes:

• All inflation figures reflect March 2025 unless stated otherwise.
• Food inflation driven by maize, rice, bean prices, and logistical issues from rains.
• Energy inflation driven by petroleum and wood charcoal price hikes.
• Source refer to the April 2025 Monthly Economic Review.