Ethiopia to register 10.8 percent economic growth in 2008

March 18, 2008 (ADDIS ABABA) — Prime Minister Meles Zenawi told parliament that Ethiopia is set to register a 10.8 percent economic growth this year despite inflation reaching 20 percent and a drought that has afflicted 9 million people.

Presenting his mid-term performance report of the government to the House of Peoples’ Representatives on Tuesday, Meles said that sustaining the fast economic growth the country is registering as well as increasing the export trade by 25 percent were the two clear goals the government set for the current budget year.

Meles said that the country’s economy will grow at no less than 10.8 percent, while the 32 percent growth scored in the export trade over the past eight months proves that the goal set for the year will be achieved successfully.

Ethiopia’s economy has grown at an official rate of 10 percent annually for the last five years.

However he underlined that worsening inflation has created a difficult situation for the low income urban dwellers. He attributed this inflation to the significant price rise in the global market of various items particularly that of oil, food grains, steel and cement.

A rapid growth of the economy can withstand the impact of this inflation and increases the income of the population, he said.

“It is with this conviction that the government has given priority to efforts aimed at realizing rapid economic growth and increasing the income of the population including that of civil servants,” Meles said.

He stressed that the government will continue to subsidize the price of some basic consumer goods and energy in order to contain the inflation. In the last few years the government spent 3.52 billion Birr to subsidize fuel and 372 million Birr on wheat, he said.

Meles also announced that the government decided to lift the Value Added tax (VAT) and Turn-Over Tax on grains as of march 19, 2008.

He further pledged that the government will take strong legal measures to tackle problems being created by illegal business people, while a task force comprising members of pertinent government bodies has been set up to permanently monitor illicit activities and take legal measures as necessary.

Meles affirmed to the house that the government would take decisive and effective measures in order to crush inflation which he said is public enemy number one.

(ST)