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Inflation Falls to 32% in Ethiopia

The annual inflation rate in Ethiopia fell to 32% in January following a slow down in food price increases according to the Central Statistics Agency.

The inflation rate for the month of January dropped from 35.9% in December following the drop in annual food inflation to 41.4% from 46.7% in December said the report from the agency.

Non food inflation also showed a decrease from 21.8 percent in December to 19.2% in January noted the Agency.

The Ethiopian government expects inflation to fall to single digits by the end of the Ethiopian fiscal year in July according to Prime Minister Meles Zenawi addressing the House of Representatives yesterday.

The rate of inflation has fallen because the government intervened in the market to buy and distribute basic foodstuffs thus enabling food prices to stabilize according to Meles.

The rate of inflation is expected to lower in 2012 going down to single digits following the peak it hit last August according to Standard Chartered plc, a London based bank.

It is to be remembered that inflation in Ethiopia accelerated in 2011 following increases in domestic food prices, the devaluation of the Ethiopian birr against the dollar and central bank loans to the government the bank noted.

Source: Bloomberg