DAR ES SALAAM (Reuters) – Tanzania’s year-on-year inflation rate fell to 17.4 percent in June from 18.2 percent a month earlier, the National Bureau of Statistics said on Monday.

National Bureau of Statistics (NBS)

The state-run National Bureau of Statistics (NBS) said on Monday that inflation fell to 17.4 percent year-on-year from 18.2 percent a month earlier after food price rises slowed to 23.5 percent year-on-year from 25.3 percent in May.

Energy price increases also eased to 20.5 percent year-on-year in June from 21.2 percent in May.

Like other east African countries, inflation in Tanzania was driven higher last year by global food and fuel costs, exacerbated by poor rains that both hit harvests and local hydropower production.

The government’s aim is for inflation to fall to single digits by the end of 2012, although analysts say prices are not yet slowing at a sufficient pace for this target to be hit.

“Tanzania’s cereal production in its breadbasket regions peaked in May/June and this should explain the current relaxation of prices in food items,” Bohela Lunogelo, executive director of the Economic and Social Research Foundation, told Reuters. “However, global fuel prices have not moved in the same direction with declining food prices locally.

“The onset of the holy Islamic month of Ramadan, which has traditionally been associated with high demand and hence higher prices of certain food items, means Tanzanians will not get a big relief in food prices. If the inflation rate decreases again in August, it will only be marginal.”

The consumer price index rose 0.1 percent in June from the previous month, down from a 0.4 percent rise in May.