(Monday, 06 June , Addis Ababa)- The International Monetary Fund (IMF) mission dispatched here in Ethiopia has released new economic growth forecasts for the country which are significantly lower than what Prime Minister Meles Zenawi recently announced.
Prime Minister Meles Zenawi, quoting state agencies, estimated an 11 percent GDP growth rate at a March press conference.
An IMF report says that this Ethiopian budget year which has entered its last month, will register slower growth than forecasted andthat next year it will be much slower.
“The mission sees lower growth for 2011/12, at about 6 percent, on account of high inflation, restrictions on private bank lending, and a more difficult business environment,” the IMF statement reads.
If the IMF forecasts are proved accurate, it will be a sign of utter failure for the five year Growth and Transformation Plan (GTP) if the government’s vision of doubling the economy up to 15 percent is to come to fruition.
Though strong remarks from the IMF mission based in Addis Ababa are rare, Ragnar Gudmundsson, IMF Resident Representative in Kenya, during December said that the GTP targets are “a bit inflated” and that the plan is “overambitious.”
“The growth and investment objectives of the new five-year GTP are ambitious. The mission urged the authorities to pace implementation of the plan to avoid any further overheating of the economy,” the latest IMF mission report seconded the official’s previous remarks that first came when the Ethiopian parliament approved the plan.
According to the statement, the IMF mission led by Paul Mathieu during its stay in Addis Ababa met PM Meles, Minister of Finance and Economic Development Sufian Ahmed, and Governor of the National Bank of Ethiopia Teklewold Atnafu and other senior officials and representatives from the private sector, the international community, and civil society. The IMF mission was in Addis Ababa between May 18 and 30.
Recently released third quarter economic performance reports by the Ministry of Finance and Economic Development (MoFED) insist that Ethiopia will register aneleven percent growth this year because they predict that the main harvest season will show a surge in agriculture production.
While forecasts from the IMF and the government differ, the economic performance after the budget year ends will be similar. “We tend to take national accounts,” Gudmundsson, IMF’s Representative in Kenya, said of what would narrow down the gap, indicating that the figures that will define the country are ultimately the say of the government.
“Strong growth has continued in 2010/11 that the mission estimates at 7.5 percent compared to an official estimate of 11.4 percent,” the IMF mission said in a statement released on May 31.
Prime Minister Meles Zenawi, quoting state agencies, estimated an 11 percent GDP growth rate at a March press conference.
An IMF report says that this Ethiopian budget year which has entered its last month, will register slower growth than forecasted andthat next year it will be much slower.
“The mission sees lower growth for 2011/12, at about 6 percent, on account of high inflation, restrictions on private bank lending, and a more difficult business environment,” the IMF statement reads.
If the IMF forecasts are proved accurate, it will be a sign of utter failure for the five year Growth and Transformation Plan (GTP) if the government’s vision of doubling the economy up to 15 percent is to come to fruition.
Though strong remarks from the IMF mission based in Addis Ababa are rare, Ragnar Gudmundsson, IMF Resident Representative in Kenya, during December said that the GTP targets are “a bit inflated” and that the plan is “overambitious.”
“The growth and investment objectives of the new five-year GTP are ambitious. The mission urged the authorities to pace implementation of the plan to avoid any further overheating of the economy,” the latest IMF mission report seconded the official’s previous remarks that first came when the Ethiopian parliament approved the plan.
According to the statement, the IMF mission led by Paul Mathieu during its stay in Addis Ababa met PM Meles, Minister of Finance and Economic Development Sufian Ahmed, and Governor of the National Bank of Ethiopia Teklewold Atnafu and other senior officials and representatives from the private sector, the international community, and civil society. The IMF mission was in Addis Ababa between May 18 and 30.
Recently released third quarter economic performance reports by the Ministry of Finance and Economic Development (MoFED) insist that Ethiopia will register aneleven percent growth this year because they predict that the main harvest season will show a surge in agriculture production.
The MoFED report submitted to parliament said the Central Statistical Agency survey found a 12.57 agriculture produce boost. The service sector, based on the third quarter review, is projected to grow by 12.5 percent.
The industry sector is expected to register 14 percent growth in a boost from 10.6 percent last year. MoFED says the three sector projection leads to a firm indication of an 11 GDP growth.
While forecasts from the IMF and the government differ, the economic performance after the budget year ends will be similar. “We tend to take national accounts,” Gudmundsson, IMF’s Representative in Kenya, said of what would narrow down the gap, indicating that the figures that will define the country are ultimately the say of the government.
Source: Capital Ethiopia, by By Kirubel Tadesse
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