Ethiopian Year-to-Year Inflation Figure Past 30%
ESAT NEWS | August’s official inflation figure released by Ethiopian Central Statistics Agency showed a year to year average increase of 30.2%.
The agency disclosed the monthly data yesterday. The 12 month comprehensive inflation figure show food items have shown the sharpest of increases. The year to year average annual inflation for food items was reported to be 36.5% while the non-food items showed a lower increase of 20.9% comparably. Of all food items meat has shown the largest increase of 57% over the course of the previous 12 months.
According to the agency, the year to year inflation data gives a better picture of where the economy is as far as inflation is concerned compared to the monthly data the agency releases. Overall price in August has shown a 1.8% increase compared to the July data. The overall consumer price index figure for August has shown a 20.2% increase compared to the previous month CPI.
In state to state comparison, the consumer price index has shown the highest increase in Tigrai region which was recorded to be 25.4%. Amhara and Oromia region have recorded a CPI figure close to 20%. The CPI figure for Addis Ababa stands at 19.7%. Most other regions have recorded a CPI figure of 19% and less.
The government has put in place various price control measures including price ceiling which have largely sent the market into turmoil. The subsidised rationing of imported edible oil and wheat didn’t solve the market situation.
The late Prime Minster, Meles Zenawi, has repeatedly promised to bring the inflation back to single digit by August 2004. All the promises he has made didn’t come to pass and price of common food items are sharply increasing only days after he was farewelled in a drawn out mourning ceremony.
One economic commentator suggested unless EPRDF settles the ongoing power struggle and restores the market confidence; prices are set to increase even higher. According to this expert, a hyperinflation similar to the one we saw in Zimbabwe a few years ago is very likely.
This commentator believes foreign donors who have been generous to the administration led by the late prime minister would be more reserved unless the political leadership issue is smoothly settled. Some donor governments might opt to use their money to force a smooth power transition in the county.
While the government is believed to be cash strapped, the Acting Prime Minister Hailemariam Desalegn is believed to have gained some loans from the Chinese government.