Ethiopia inflation rises to 7.5 pct in September yr/yr

Ethiopia One Birr
Ethiopia One Birr

ADDIS ABABA (Reuters) – Ethiopia’s inflation rate rose to 7.5 percent year-on-year in September from 5.3 percent in August, the Horn of African country’s statistics office said on Friday.

The Central Statistical Agency (CSA) said the overall food price index increased 1.4 percent in September from a year earlier, with all food components rising.

The agency said non-food inflation rose by 17.2 percent, with primarily imported goods such as cigarettes, construction materials and clothing showing significant increases.

“Cigarettes and tobacco increased by 21.5 percent, clothing and footwear by 24 percent and construction materials by 16.3 percent,” the CSA said, referring to the year on year change.

Ethiopia was hit by soaring inflation in 2008 and much of 2009, driven by record global food and fuel prices. The rate plummeted from July 2009 to October 2009 after the government stopped state borrowing and increased bank reserves.

It devalued its currency, the birr by 16.7 percent at the beginning of last month.

Prime Minister Meles Zenawi says his government will target annual inflation of 6 percent over the next five years.

Analysts say, however, that there is a risk inflation rates will continue to creep higher after the central bank of Ethiopia devaluation of the Ethiopian birr.

Related:

Ethiopia Devalues Its Birr Currency 17% Against Dollar, Central Bank Says