The International Monetary fund issued a statement praising the macroeconomic and general development performance of 
Ethiopia in the last year after carrying out the recent Article IV Consultation.
The IMF delegation lead by Michael Antingi-Ego announced that the execution of tight monetary policies by the central bank including efforts to contracting the money supply and sterilizing foreign exchange has contributed to decelerating the rate of inflation significantly.
The report cited the National Bank’s initiative to reduce the gross foreign exchange reserves to cover less than two months of imports from the considerably high reserves in the last fiscal year which had been an inflationary principle.
The national budget execution and the strict commitment of the government to eliminate borrowing from the national bank to finance public expenditure were also praised by the IMF delegation.The report raised concern on the increasing fiscal impulse from public enterprises. It is to be remembered that the fund had expressed concern over the growing level of debt channeled to the public sector which is not seen on the government balance sheet.
The fund also stressed the need for higher interest rates to support domestic resource mobilization and monetary policy implementation.
The IMF forecasted an inflation rate of about 22%, and 7% real GDP growth for the next financial year. The Ethiopian economy will continue to grow at a healthy pace with declining inflation anticipated should the tight monetary and fiscal policies remain in place concluded the IMF.
Source: The Reporter
