Tanzania's inflation rose for the ninth successive month in July on the back of higher food and energy costs and analysts said it was set to keep rising due to a poor supply outlook for staple foods and the cost of importing oil.

The year-on-year inflation rate jumped to 13 percent in July from 10.90 percent in the previous month, the statistics office said.

Inflation in east Africa is driven by the weather because food carries significant weighting in consumer price baskets. The region relies heavily on rain-fed agriculture and drought in the past few years has hit supplies.

Food and non-alcoholic beverages have a 47.8 percent weight in Tanzania's basket of goods used to measure inflation. It was cut from 55.9 percent in October in an overhaul of the calculation methodology.

"If they didn't rebase the method of calculating the inflation rate, we would be somewhere near a 20 percent inflation rate right now," said Humphrey Moshi, professor of economics at the University of Dar es Salaam.

Food prices increased by 15.9 percent after an increase of 12.3 percent in June, pushed up by prices of rice, white maize grain, maize flour, wheat flour, beef, fruit and sugar.

"The food situation in neighbouring countries such as Kenya and Somalia is bad because of drought. This adverse situation in the region will put a strain on the overall food supply in Tanzania," said Moshi.

GLOOMY OUTLOOK

The annual inflation rate for energy increased to 34.2 percent in July from 29.0 percent in June amid chronic power shortages in the country.

"The outlook is not so good ... Food prices historically peak in January-February before the next harvest season begins, its worrying that food prices have started to rise very early," Bohela Lunogelo, executive director of the Economic and Social Research Foundation (ESRF), a Tanzanian think-tank, told Reuters.

The annual non-food inflation rate rose 7.4 percent in July from 7.2 percent a month earlier.

Items in this category whose prices rose in July were clothing material, petrol, diesel, kerosene, household textiles, household appliances, charcoal, passenger transport, internet services and accommodation services.

Analysts said apart from the risk of higher food and fuel prices, imported inflation from a weakening currency was a key factor.

"We have a very import-dependent economy and exports account for just half of our import needs. There is imported inflation from oil and other imports," said Moshi.

The shilling currency has been easing steadily against the dollar since the start of the year. Over the last five years the unit has depreciated by 20 percent.

"Even if oil prices stop rising at the world market, we still have a problem of foreign exchange because of the weak shilling," he said.

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