NAIROBI/WASHINGTON (Reuters) -Ethiopia’s inflation is expected to decline to 10% in the coming financial year, the country’s central bank chief Mamo Mihretu said on Thursday, the lowest level in a decade thanks to the government’s reform programme.
The East African nation struck a four-year, $3.4 billion program deal with the International Monetary Fund last July and is undertaking far-reaching reforms which included the floatation of its birr currency and getting its debt restructuring back on track.
Inflation has been a major headache for Ethiopia, running at about 30% for three consecutive years, though in March it had already declined to 13%, Mamo said during a briefing at the IMF and World Bank spring meetings in Washington. The country’s fiscal year runs from July to July.
Mamo said he expected exports from Ethiopia to double and predicted remittances would increase by at least 25%, and noted that the country had managed to build up its foreign currency reserves.
“One of the most serious issues that we faced before the reform was the dwindling and falling reserves that we had to worry about on a daily basis,” he said.
“After the reform, our reserves level increased threefold. The reserves in the banking system increased twofold … there is a clear impact of this reform in terms of increasing and boosting the inflow into the economy.”
(Reporting by Duncan Miriri in Nairobi and Karin Strohecker in Washington; Editing by Paul Simao)
