Ethiopia’s January inflation rate hits 17.7 pct

by yeEthiopiaforums

* Food prices rise 13.6 percent

* Non-food prices up for 5th straight month

ADDIS ABABA, Feb 14 (Reuters) – Rising food prices helped push Ethiopia’s annual inflation rate up to 17.7 percent in January, from 14.5 percent a month earlier and increasing for a second straight month, official data showed on Monday.

Food prices, which have the biggest weighting in the inflation measure, rose 13.6 percent from a year earlier, the Central Statistics Agency (CSA) said.

Non-food inflation accelerated for the fifth consecutive month in January, rising by 23.7 percent year-on-year.

Ethiopia inflation rises

Ethiopia has placed price caps on more than a dozen commodities including some essential foodstuffs. Government officials accuse traders of artificially inflating food prices on the back of global price increases and a September devaluation of the birr currency ETB=.

Prime Minister Meles Zenawi has said that if traders failed to cut prices on essential goods in accordance with the price caps then government outlets would start selling items at fixed prices.

While the inflation rate is on the rise, it is well below levels seen in late 2008 and early 2009. Inflation hit 64.2 pct in July 2008 at which point the government stopped state borrowing and increased bank reserves to drive inflation down.

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