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UPDATE 1-Tanzania Dec inflation unchanged, c.bank misses target

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* C.bank had aimed for inflation at 10 percent by year-end

* Food prices to keep inflation high - analysts (Adds details, quotes)

By Fumbuka Ng'wanakilala

DAR ES SALAAM, Jan 15 (Reuters) - Tanzania's annual inflation rate stayed at 12.1 percent in December, missing the central bank's target for a fall to 10 percent by the end of the year, official data showed on Tuesday.

Slowing food prices had helped push year-on-year inflation lower for 11 months running through to November, but that trend could not be sustained in December.

The central bank has also forecast that headline inflation will fall to single digits by the end of the financial year in mid-2013.

"The annual headline inflation rate for the month of December 2012 has stagnated at 12.1 percent as recorded in November 2012," state-run National Bureau of Statistics (NBS) said in a statement.

The statistics office said food and non-alcoholic drinks inflation, which carry a 47.8 percent weighting in the consumer price basket, slowed to 13.1 percent year-on-year in December from 13.4 percent in November.

Central bank officials were not immediately available to say how they intend to tackle the above-target inflation.

Analysts said inflation would remain high due to food prices, partly owing to low rainfall. Rainfall has a major influence on inflation in the agrarian economies of east Africa, with good rains leading to good harvests and lower prices.

"The price of food, such as rice, maize and sugar also remains very high at household level," Humphrey Moshi, professor of economics at the University of Dar es Salaam told Reuters.

"I've always doubted that the government would meet the target of achieving a single digit inflation rate before the end of the year in 2012. Going forward in 2013, I don't expect to see a significant decline in the inflation rate."

NBS said the core inflation rate, which excludes food and energy costs, also increased to 8.9 percent for the month of December from 8.5 percent in November.

The NBS said the monthly headline inflation rate for the month of December 2012 increased by 1.9 percent compared to 0.7 percent recorded in November 2012.

The annual inflation rate for energy also fell to 17.8 percent in December from 18.6 percent a month earlier. (Writing by James Macharia; editing by Stephen Nisbet)

http://www.globalpost.com/dispatch/news/thomson-reuters/130115/update-1-tanzania-dec-inflation-unchanged-cbank-misses-target