Tanzania’s inflation rate in August dropped to a one-year low, defying a trend where the cost of living in other East African countries has been edging up over the past three months.

Tanzania’s National Bureau of Statistics on Monday said that the overall inflation rate in the region's second largest economy fell to 6.7 per cent from 7.5 per cent in July, the lowest pace of price increases in a year.

In August 2012, a time when The Bank of Tanzania was instituting measures to tame the inflation rate, prices of basic goods and services rose by 14.9 per cent.

“The speed of price increase for commodities in August decreased compared to the speed recorded in July. However, the overall index went up to 139.93 in August 2013 from 131.09 recorded in August 2012,” said Tanzania’s National Bureau of Statistics in a statement.

The National Institute of Statistics of Rwanda, however, on Tuesday announced that the country’s inflation rate in August rose for the second consecutive month, to 4.04 per cent from 3.52 per cent in July, on account of continued increase in food prices.

A week ago, the Uganda Bureau of Statistics said that the pace of price increases of basic goods and services rose to 7.3 per cent in August from 5.1 per cent in July also on account of rising food prices.

The Kenya National Bureau of Statistics also said that the country’s inflation rate rose to 6.67 per cent from 6.02 per cent respectively due to an increase in fuel prices that pushed up kerosene, electricity and transport prices.

The National Institute of Statistics of Rwanda said that the increased inflation rate was due to a 1.17 per cent increase in the consumer price index which tracks the basket of goods and services which is used to calculate the cost of living. 

“The increase in the consumer price index of 1.17 is attributable primarily to the increase in Food and non-alcoholic beverages,” said the National Institute of Statistics of Rwanda in a statement.

An increase of the inflation rate indicates that prices are going up at a faster pace, piling pressure on household incomes which may not be going up at the same or higher rate.

If this happens over an extended period of time, disposable incomes drop and as a result households will spend, save or invest less and can have a negative impact on the growth of an economy.   

The Central Bank of Kenya, which last week decided to keep its benchmark rate unchanged at 11 per cent and Bank of Uganda which raised its rate to 12 per cent are however optimistic that the current inflationary pressures are short lived and will not persist for an extended period of time. 

READ: Uganda raises key rate as Kenya keeps it on hold