The consumer price index rose 0.1 percent during July, the same rate as in June, the National Bureau of Statistics said.

The food and non-alcoholic drink component, which accounts for 47.8 percent of the basket of goods used to measure inflation, fell 0.5 percent in July.

Over a twelve month period, the increase in food and non-alcoholic drink prices eased to 20.8 percent from 23.5 percent in June.

The government's aim is for inflation to fall to single digits by the end of 2012. Haji Semboja, an economist at the University of Dar es Salaam, said the government would struggle to meet this target.

"The inflation rate will slightly increase or remain stagnant in August. This is due to the fact that food prices tend to rise during the Islamic holy month of Ramadan which straddles July and August this year," Semboja said.

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.