Ethiopia’s Inflation drops to 20.9 pct in June

By Tesfa-Alem Tekle

July 9, 2012 (ADDIS ABABA) – Ethiopia’s annual inflation has seen a 20.9 percent drop in June from 25.5 percent the previous month, the Central Statistical Agency said on Monday in its monthly report.

The inflation decline in June is for the fourth straight month and was achieved mainly due to eased food prices.

Food inflation slowed to 21.5 percent from 29.2 percent two months earlier, while non-food inflation almost remained unchanged only saw 0.2 percent drop, the agency said.

The Horn of Africa country’s inflation surged to 36.3 percent in February 2012 mainly impacting on the lives of the poor and low-income society.

Coffee export is the back bone of Ethiopia’s economy. However, sesame, oil seeds and livestock exports are also major contributors to the economy.

The east African country is Africa’s biggest coffee producer and world’s fourth-largest sesame exporter after China, India and Myanmar.

Ethiopian officials say the country has been registering double digit economic growth for at least the past five years, however, inflation has been a major setback.

The country intends to slow inflation below 10 percent, which won’t influence economic growth. Ethiopia hopes to achieve projected growth of around 11 percent this year.

The International Monetary Fund (IMF) has raised Ethiopia’s growth forecast for 2012/2013. According to IMF latest report, Ethiopia’s economy will grow by 7 percent and inflation will be around 22 percent by year-end.

(ST)