Ethiopia's annual inflation rate stood at 12.6 percent in July 2019, with food prices up 13.7 percent, according to Central Statistics Agency figures reported by New Business Ethiopia.
A street in Addis Ababa's Merkato market district, photographed on April 3, 2023. (Abpics234 / Wikimedia Commons, CC BY-SA 4.0) [file photo]
Food inflation rose from 13.1 percent in June, while non-food inflation eased to 11.4 percent from 11.9 percent, the agency said. Its rates measure the annual change based on a 12-month moving average. Consumer prices rose 1.4 percent from June to July.
In July 2018, general inflation was 14.8 percent, with non-food inflation at 16.5 percent and food inflation at 13.7 percent, according to the agency's monthly report.
At a discussion organized by the Forum for Social Studies, Addis Ababa University economics professor Alemayehu Geda said government investment had fueled inflation that was making life difficult for the poor, The Reporter said. He put average annual growth at about 6 percent rather than the officially claimed 10 percent.
Alemayehu said public investment equal to 40 percent of GDP far exceeded domestic savings, which he estimated at 10 percent rather than the official 22 percent, so the state turned to loans. He put external debt at $29 billion, with domestic debt about the same, and said money supply grew from 68.2 billion birr in 2007 to 740.6 billion birr in 2018, about 27 percent a year.
He said two devaluations of the birr on International Monetary Fund and World Bank advice had cut purchasing power without boosting exports, and urged structural rather than monetary solutions. Another panelist, Tewodros Mekonnen, said inflation had discouraged savings and investment and pushed money into assets expected to hold their value.
Sources: New Business Ethiopia, The Reporter