(Thursday, 14 July 2011 , The Africa Report)- Ethiopia’s inflation quickened to 38 per cent last month in June from 34.7 in May, the country’s statistical agency said on Wednesday.
The sharp rise has been blamed on the increase in grain prices announced more than a month ago. Prices of wheat, maize, barley, meat and other basic commodities went up significantly.
Although Ethiopia is predicting a double digit economic growth in the 2011/2012 fiscal year, the International Monetary Fund recently announced that the Horn of Africa country should expect a 7.5 percent growth this year.
However, the government has since lifted the price controls on some of the items, including meat and beer.
This saw Ethiopia’s year-on-year food inflation increasing by 45.3 percent from the same period last year.
“We don’t really know why there is a monthly rise in prices of foodstuffs and other commodities in our country,” said Mesfin Mulatu, a father of three who lives in the capital Addis Ababa.
“The government is telling us that it is taking measures to control the problem. Where is their solution?”
“We don’t really know why there is a monthly rise in prices of foodstuffs and other commodities in our country,” said Mesfin Mulatu, a father of three who lives in the capital Addis Ababa.
“The government is telling us that it is taking measures to control the problem. Where is their solution?”
Early this month, Prime Minister, Meles Zenawi promised to take measures to tackle the rising inflation.
Meles said he will take immediate action to stop government borrowing from the central bank and reduce the country’s currency reserves.
Although Ethiopia is predicting a double digit economic growth in the 2011/2012 fiscal year, the International Monetary Fund recently announced that the Horn of Africa country should expect a 7.5 percent growth this year.
IMF says that inflation, Ethiopia's main macroeconomic challenge, will impact on the country's current economic growth, believed to be among the highest growth rates in Africa.
But Finance and Economic Development Minister Sofian Ahmed told parliament last week that the economy will still grow by 11 per cent in the current fiscal year.
As part of the inflation control measures, the government introduced price controls for 18 basic commodities at the beginning of the year.
However, the government has since lifted the price controls on some of the items, including meat and beer.
The suspension of the controls saw prices of many basic commodities skyrocketing by almost 25 percent within a day.
Source: The Africa Report
Source: The Africa Report
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