Ethiopia’s Annual Inflation Rate Falls to 35.9% in December

January 9, 2012

Inflation in Ethiopia, Africa’s biggest coffee producer, surged to a high of 40.6 percent in August because of a rise in global commodity prices, according to the government. The International Monetary Fund said price increases were stoked by “excessive” growth in money supply.

The inflation rate may fall to below 10 percent by June amid reduced central bank lending and crop harvests reach the markets, Access Capital, an Addis Ababa-based research group, said in an e-mailed statement today.

High prices early last year because of the effects of a currency devaluation in September 2010 may also result in a “sharply improving” annual inflation rate, Access Capital said.

Increased cement production has helped reduce prices in the infrastructure-building industry, said Zemedeneh Negatu, managing partner for Ernst & Young LLP in Ethiopia.

Achieving inflation of less than 10 percent “should be a gradual and steady process that doesn’t negatively impact the economy’s growth,” he said in an e-mailed response to questions today.