December 2014

Current inflation in Ethiopia

Ethiopia’s inflation rose from 5.9% to 7.1% in December 2014, the statistics office said last week.

Prices for food, including vegetables, sugar, and fruit, have increased 6.5% last month, and non-food items, such as clothes, also became more expensive. The higher prices in food and non-food items may contribute to the jump of inflation rate, said the Central Statistics Agency.

In 2011, the annual inflation rate reached 33.2%, according to the World Bank. In an effort to lower inflation, Ethiopia’s government adopted prudent monetary and fiscal policies that focused on reducing domestic borrowing and improving tax administration.
These measures have effectively brought down inflation rate to single digits. However, life is still very challenging for most people in Ethiopia, especially for about one third of Ethiopians, who live under the poverty line. They are particularly vulnerable to the sudden rise of food and fuel prices and inflation.

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