The National Planning Commission (NPC) announced that Ethiopian’s per capita income reached USD 863 in 2016/17 and the country’s GDP now stands at 1.8 trillion birr.
The commission that appeared at the parliament to deliver a report of on an 11 month performance of the fiscal year which ended yesterday stated the country’s supply side GDP grew by 10.9 percent during the 2016/17 budget year.
The NPC report stated the agriculture sector grew 6.7 percent, which was around two percent in the 2015/16 budget year. The industry and service sector grew 18.7 percent and 10.3 percent respectively.
“In the time market rate the expenditure side GDP stood at 1.807 trillion birr, which is USD 66.2 billion with the current exchange rate,” the report explained.
For the 2015/16 budget year the GDP stood at 1.5 trillion birr, with is a growth of 17.2 percent, the commission report says.
Per capita income has also risen. It stated that a year ago per capita income stood at USD 863 meaning it has grown by 62USD compared with the preceding year.
In the 2015/16 budget year the per capita income was USD 801.
The report stated that the service sector continues have the biggest share of GDP at 39.3 percent. The report indicated the service sector grew by 0.2 percent. While the agriculture sector, which was affected by El Niño made up 36.3 percent. Agriculture went down from 37.8 percent to 36.3 percent of the GDP.
According to the report industrial sector, which was mainly dominated by construction sector, has grown more than service, at 1.3 percent compared to the 2015/16 budget year.
The report stated that the GDP share of the industrial sector is 24.4 percent.
Government officials argued that in the past decade the country registered double digit growth but some international financial and economic organizations and local economic experts say the growth is not that high. However all agree that Ethiopia has been growing economically at a very high rate. At his appearance at the Parliament PM Abiy Ahmed (PhD) hinted that the country’s economic growth for the past budget year would be between nine and 10 percent.
Ethiopia’s per capita income reaches USD 863, GDP 1.8 trillion birr
The European Monetary Union and Trumpism
When Italy’s new populist government, formed by the far-right Lega Nord and the far-left Cinque Stelle, came into being at the end of last May, it was an important date in the history of the Euro. It is the day when the unthinkable happened. The myth of the unbreakable nature of the common currency collapsed. For the first time, markets speculated openly that Italy could exit the monetary union. This had previously been considered only a very remote possibility. Accordingly, the yields on Italian government bonds shot up within a few hours, with 10-year maturities above 3%.
Professor John Burton of Leeds University stated that this was not just an “industrial accident.” It is rather the beginning of a new era. Perhaps the best way to put it is that Trumpism has come to Europe. The United States president Donald Trump stands for a populist economic policy. He questions everything. He does not abide by the rules. He also feels no longer bound by long-standing alliances. He cherishes the fact that he is unpredictable in his actions.
Now, it is clear that this playing out in Europe for the first time to a greater extent. All of a sudden, the pro-European orientation of Italian politics, above all the affiliation to the Euro, is under serious doubt.
According to Professor John Burton, the same applies to the Maastricht Treaty which prioritizes price stability and sound public finances. Italy’s apparent turn is all the more stunning, indeed self-defeating, as the country has made extraordinary efforts in recent years. It managed to reduce the public budget deficit to below 3pct and to achieve a current account surplus.
Now, one could say that the Lega/Cinque Stelle coalition government of Italy plans are all unreal and should not be taken so seriously. Professor William Welsh of Michigan University argued that after all, according to surveys, the Italian population is still in favor of the Euro. However, because the current ruling parties, as in the case of the American president, are democratically legitimized, this changes the equation considerably. True, they may change their opinion over time. According to Professor William Welsh, there may also be new elections. However, as long as that is not the case, it is acceptable the way it is.
Professor William Welsh further noted that from now on, Europeans from the European Union member countries will no longer live in the orderly world of the Maastricht treaties, but in the world of a “populist monetary union,” if they will. The Euro and European banks are becoming more vulnerable to crises of confidence and international capital movements. The advantage of the Euro over the former fixed-income system of Bretton Woods is gone.
The new populism in the European Union will have rather direct effects on interest rates in the Euro area. One could even speak of a direct “populism penalty.” Research studies indicated the fact that before monetary union, Italy’s interest rates were very high. They were one of the reasons why Italy joined the Euro.
Then, after the introduction of the common currency, there was almost complete synchronization of interest rates. The spread was minimal. Indeed, it was far too low and did not sufficiently reflect the risk differences. In this respect, everyone was happy that the spreads rose again after the financial crisis 2008/2009.
Now comes a new phase. The spread now shows not only the different economic conditions, but also the degree of populism in the individual countries. This means that the greater the likelihood that a country will not stick to the rules or question the Euro, the higher the spread. Beyond Italy, this also applies to other countries, if and when populism takes hold there.
