Addis Fortune (Addis Ababa)
The inflation rate in Ethiopia reached a 22-month high following a persistent rise of food costs, especially on cereal products, lifting the headline inflation to 10.4pc, signalling unhealthy macro economy in the country.
Announcing the result, the Central Statistical Agency (CSA) linked the rise in inflation to the hike in prices of foods by 13.3pc in the past month, as compared to the one observed during the same period last year. This is a major setback for the government which targeted to keep the inflation rate in single digit, below eight percent.
Prior to last month, the government had managed to register single digit inflation for more than two and half years. However, the inflation rate has been surging at a quick pace since October 2016.
The growth in inflation is conforming to the projection given by BMI, a Fitch Group Company and think tank, six months ago. The think tank forecasted that the country would experience a surge in inflation throughout the period of 2017 owing to rise in food insecurity and erratic rainfall.
“It is visible that the inflationary pressure is driven by low agricultural productivity,” said Tadele Ferede (PhD), an economist and a lecturer with over two decades of experience. “There is a wide mismatch between the demand and supply.”