The International Monetary Fund (IMF) said Ethiopia has experienced reduced inflationary pressure, appreciating the government’s efforts to control rising prices in light of recent macroeconomic reforms.
The IMF’s most recent review indicated that inflation rates in July and August of 2024 were lower than expected. The report stated, “There have been no indications of significant inflationary pressures, and the transition to a market-determined exchange rate is proceeding smoothly.”
While there were anecdotal reports of notable price increases for some imported goods in Addis Ababa, such as cooking oil, the IMF noted that there have been no signs of widespread price pressures.
To address concerns about perceived unjustified price hikes and hoarding, local authorities in Addis Ababa took actions including temporary shop closures.
Simultaneously, the central government imported 50 million liters of edible oil and $20 million worth of sugar to increase supply and alleviate price pressures, aligning with measures to reduce the social impact of the reforms outlined in the Fund-supported program.
Headline inflation decreased to 17.2 percent, driven by reduced food price inflation, particularly for staple goods, and the effects of credit growth restrictions.
In its latest report released on Monday, November 5, the IMF revised its inflation forecast for the current budget year from 30.1 percent in July to 25 percent.
Looking ahead, the IMF projects that inflation will drop to a single digit by the fiscal year 2028/29. If this projection holds true, it would mark nearly two decades since the nation grappled with hyperinflation following the 2005 national election.
MG/as/APA