Central Statistical Agency said yesterday that Ethiopia’s inflation rate hit to 38.1 percent in June up from 34.7 percent the previous month driven by higher food prices a rise in the prices of wheat, maize, barley, meat and potatoes among other items. 
Food prices rose to 45.3 percent in June after rising 40.7 percent in the May, according to the agency.
According to Mitiku Kassa, Minister of State for Agriculture, food prices in east Africa have gone up due to drought in the region. Money supply growth of as much as 40 percent has played a “significant role” in rising prices, Prime Minister Meles Zenawi said on July 5.The international Monetary Fund had predicted on 31 May 2011 that inflation might undermine economic growth in Ethiopia. IMF had said that the economy would fall from 7.5 percent this year to 6 percent in the 2011/2012 fiscal year and that the country's monetary policy was pushing up inflation which, combined with restrictions on bank lending, would in turn bring about a slower economic growth.
On the other hand, Hailemariam Desalegn, deputy prime minister of Ethiopia, had said on 8 June 2011 that Ethiopian economic growth might exceed 10 percent contrary to the IMF's May 30 prediction.
Source: Bloomberg, Reuters
