ADDIS ABABA, May 10 (Reuters) – Ethiopia’s year-on-year
inflation rate rose for a second straight month to 29.5 percent
in April, from 25.0 percent a month earlier, driven by a sharp
rise in food prices, the statistics agency said on Tuesday.
“The total price index of cereals in April 2011 has
increased by 14.6 percent as compared to the same month last
year, which significantly contributed to the rise in the indices
of food and the general consumer price index,” the Central
Statistical Agency said in a statement.
Ethiopia has imposed price ceilings on more than a dozen
commodities including some essential foodstuffs. Food accounts
for just over 57 percent of the basket used to measure the
inflation rate.
Government officials have accused traders of artificially
inflating food prices on the back of higher global prices and a
September devaluation of the birr currency ETB=.
Ethiopia is grappling with rising inflation like other
countries in Africa, including Uganda where spiralling food and
fuel prices have led to protests. [ID:nLDE73D0FY]
(Reporting by Aaron Masho; Editing by Richard Lough and Susan
Fenton)
Inflation in Ethiopia accelerated to 29.5 percent in April as food prices jumped, the Central Statistical Agency said.
The inflation rate increased from 25 percent in March, the Addis Ababa-based agency said on its website today. Food prices, which make up more than half of the basket of goods used to calculate overall inflation, surged 32.2 percent from a year earlier, while non-food items rose 25.6 percent, it said.
Annual inflation has quickened from 5.3 percent in August following an 18 percent devaluation of the birr against the dollar on Sept. 1. In January, the government introduced price controls on goods including bread, meat, sugar and beer, citing a lack of competition in the domestic market.
Global food prices have risen this year as U.S. corn stockpiles fell to the lowest since 2007, soybean inventories shrank to the smallest since 2003 amid flooding in Canada, China and Australia and droughts in Russia and Europe. The world food- price index tracked by the United Nations’ Rome-based Food and Agriculture Organization rose to 232.1 points in April from 231 points in March, having fallen from a record 237.2 in February.
“Clearly the international commodity and fuel price shock has had some impact, but loose monetary policy and the large depreciation have played a role too,” Sukhwinder Singh, the International Monetary Fund’s resident representative in Ethiopia said in an e-mailed response to questions today.
“Government needs to tighten its monetary policy and ensure any fiscal response to the global shocks is affordable and well targeted,” Singh said.
Ethiopia’s central bank uses measures including minimum deposit rates and Treasury-bill auctions to conduct its monetary policy. Any inflation rate above the government’s single-digit target is a “concern,” central bank spokesman Alemayehu Kebede said.
To contact the reporter on this story: William Davison in Addis Ababa at [email protected]
