The year on year inflation rate in Ethiopia has dropped to 12.9 percent, according to data revealed by the Central Statistics Agency. The data showed that this was the lowest the inflation rate had been in the last year.

The year on year inflation rate fell from 15.6 percent in November, following a trend downwards from the 36.3 percent peak in February noted the statistics agency.

Food price inflation fell from 13.4 percent in November to 11.8 percent year-on-year in December while non-food inflation dropped  from 19.4 percent to 14.6 percent. The consumer index dropped from 0.7 percent month-on-month during December following a drop of 0.5 percent the previous month according to the CSA.

It is to be remembered that the International Monetary Fund had warned that inflation was the most significant challenge facing Ethiopian policy makers although the Ethiopian government had maintained that inflation rates would lower to single digits by the end of 2012.

The current lowering of the inflation rate is due to increased agricultural production and the government subsidies supporting a range of basic staples according to government sources.

Ethiopia is targeting a growth rate of 11 percent for the coming year which would be the seventh consecutive year of 11 percent growth said government officials.

Source: Reuters