Capital Ethiopia Newspaper

Annual inflation decelerates to 32 percent in January

MP says GTP’s target already missed
The country’s annual inflation eased in January to 32 percent from 35.9 percent in earlier month, said a monthly consumer price indices’ report the Central Statistical Agency of Ethiopia (CSA) released this week.
Aided by decelerating food prices that consume up to 60 percent of an average family’s income, it is for the fifth straight month that the cost of living has improved significantly since the birr was devaluated by 20 percent in September 2010.
The annual food inflation rate slowed to 41.4 percent in January, 2012 from 46.7 percent in December, 2011, according the CSA. “In January 2012 declines were observed in the prices of wheat, maize, sorghum, pulses and spices,” said the CSA in its report.
Nonfood prices also improved in January to 19.2 percent from 21.8 percent a month earlier.
Prime Minister Meles Zenawi says based on the latest trend, he expects inflation to drop to single digits by the time the current fiscal year comes to an end in early July.
“Following the government’s measures to curb inflation, prices of various commodities are slowly improving. The inflation rate reached 40.6 percent in August but it has been slowing step by step since September and has eased to 32 percent in January. If this trend continues, it is expected to drop to single digits by the end of the budget year,” Meles told the House of Peoples’ Representatives on Wednesday when he presented the federal government’s six month performance.
According to the PM’s report, the feds have narrowed budget gap during the six month and deficit stood at “941 million birr only.”
The federal government has a 117.8 billion birr budget approved for the budget year. The budget suffers from a record deficit of 17.22 billion birr.
The single opposition MP Girma Seifu, quoting an unnamed study, said that the five year Growth and Transformation Plan (GTP) target of holding inflation to single digits has been already missed.
“According to one recent study, since inflation rates have been so high that even if it goes to zero now its average for the five year GTP period will be high and this shows one of the GTP’s crucial targets has been missed. What is your take on this?” Girma asked in questions addressed to the PM after hearing the federal government’s performance report.
Meles didn’t directly respond to the assessment by MP Girma but rebuffed what he calls ‘repeated rumors and unsubstantiated claims’.