INFLATION & CONSUMER PRICE INDICES: JAN - JUL 2008

I recently posted an article titled Tanzania inflation surges to 9.5% on the forum. That is obviously a very high rate, and according to some anonymous sources, the actual inflation may be even higher than that as the National Bureau of Statistics, NBS is apparently usually under political pressure from the government to play around with the figures so as to ensure the inflation is as small as they can report it, with the main target being keeping the rate under double figures always. So if the claims are indeed true, the actual inflation should be at least 10%; maybe even 11%!! This is very alarming for investors in the financial markets because the wighted YTM of 364-day T-Bill is only 11.50% whereas the total YTM for the 35-, 91-, 182- and 364- days T-Bills is 9.86%.

I extracted the following table of CPI and inflation development for Jan-Jul 2008 from the NBS website

(Click on the image to enlarge)


What do you think are the courses for such high inflation rates and what should we do to control the inlfation?