Ethiopia's inflation rate drops by 9.4 per cent
By Vincent Ombati |
Notable indicators of the new inflation rate were highly boosted by a half drop in non-food stuff from 31.5 per cent to 15.3 per cent.
The inflation rate in Ethiopia has fallen from 29.3 per cent recorded in June last year to 19.9 per cent in June this year. The National Bank of Ethiopia (NBE) has said that the drop of 9.4 per cent in the past year can be attributed to the government's monetary policy set in August 2023.
"This decline is just in line with the inflation target set by the NBE in its strategic plan a year ago and it shows the progress of the monetary policy stance adopted during the past year and other supporting supply-side measures that increased output," stated NBE.
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NBE revealed setting the new inflation target a year ago and they have been following it up every month. The bank affirmed that the method captured the most recent momentum in prices well.
"The month-on-month inflation rate has continued to stabilise over the past quarter and was 0.9 per cent in June 2024, equivalent to an annualised rate of 11 per cent if the price trend continues at this monthly rate," NBE said.
Notable indicators of the new inflation rate were highly boosted by a half drop in non-food stuff from 31.5 per cent to 15.3 per cent. The bank also indicated food inflation dropped by 5.3 per cent from 28 per cent last year.
Some of Ethiopia's reforms include providing a favourable working environment for foreign business investors. In June, the Ethiopia Council of Ministers approved the draft NBE Proclamation and Banking Business Proclamation. The move will enable foreign banks to invest in the banking system in Ethiopia.
During the 7th Annual East Africa Finance Summit on May 9, 2024, NBE Governor Mamo Mihretu said the opening of Ethiopia's financial sector to foreign investors will help bring innovation in the sector as well as desired competition.
He noted the new policy will allow reputable foreign investors to operate within Ethiopia, bringing in fresh new capital, innovative products, and global best practices.
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