Ethiopian Inflation Accelerates Following Devaluation

By Will Davison

Ethiopia’s inflation rate increased to 17.7 percent in January as a devaluation of the local currency in September pushed up import costs, the Central Statistical Agency said.

Inflation accelerated from 14.5 percent the month before, the agency said in an e-mailed statement today. Food prices rose 13.6 percent, while non-food items leaped 23.7 percent.

Ethiopian birr

The inflation rate has risen from 5.3 percent in August following a 17.5 percent devaluation of the birr against the dollar on Sept. 1. There are no plans for further major devaluations, National Bank spokesman Alemayehu Kebede said on Jan. 24.

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The Ethiopian government introduced price controls on goods including bread, meat, sugar and beer on Jan. 6, citing a lack of competition in the domestic market. More restrictions may be placed on other goods, a Trade Ministry official said on Jan. 11.

World food prices rose to a record in January on higher dairy, sugar and cereal costs, the United Nations Food and Agricultural Organization said on Feb. 3.

To contact the reporter on this story: William Davison in Addis Ababa via Johannesburg at pmrichardson@bloomberg.net.

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