Ethiopia’s inflation jumps to 39 percent


Posted on August 9, 2011 09:05

Ethiopia’s inflation quickened to 39.2 per cent last month up from 38 percent in June, the country’s Central Statistics Agency (CSA) said on Monday.

The agency attributed the rise in inflation to the increase in the prices of food and other basic commodities as well as property prices.

Ethiopia is among countries severely affected by the current drought in the Horn of Africa where over 12 million people are in need of emergency food aid.

The country says it needs urgent help to feed 4.5 million people including thousands of Somali refugees fleeing famine and conflict in their country.

CSA said food prices, which account for 57 per cent of the consumer price index, jumped 47.4 per cent on more expensive cereals, oils and fats, pulses and dairy products.

The Ethiopian government had pledged to reduce inflation to single digit figures this year. In May inflation was at 34,7 per cent.

Last month Prime Minister Meles Zenawi had vowed to reduce to zero government loans from the central bank while reducing government reserves held by the central bank as a way of fighting the runaway inflation.

Transport costs, housing and prices of alcoholic beverages and cigarettes went up by an average of 40 per cent during the period under review.

But Ethiopia still expects to register a 11 per cent economic growth during the 2010/2011 fiscal year, which the International Monetary Fund (IMF) says will be reduced to half due to the recent surge in inflation.

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