Ethiopia's Economic growth to slow down 5 percent in 2012 - IMF

IMF said Ethiopia's Economic Growth to Slow Down 5 Percent In 2012

May 13, 2012  —  Ethiopia's economic growth will slow down to 5 percent in 2012, according to the International Monetary Fund (IMF).

Attributing the decline to surging inflation rates, rampant corruption, and a difficult business climate, the Washington-based bank lender reduced Ethiopia's growth forecasts from 7.5 percent last year down to 5 percent this year in its annual World Economic Outlook data released in mid-April.

Amid soaring inflation rates averaging around 35 percent for over the past two years, the IMF report shows consumer prices in Ethiopia have risen from 18.9 percent in 2011 to 38.11 this year.

Propelled by higher commodity prices and mineral and oil production, growth averages in sub-Saharan Africa is expected to increase to 5.4 percent this year, up from 5 percent last year.

"Sub-Saharan growth is expected to pick up somewhat in 2012 helped by the coming on-stream of new mineral and oil production and the reversal of the adverse supply shocks experienced in 2011," the bank said.

Regionally,  the report shows Eritrea will have the fastest-growing economy in East Africa, while regional economic giant Sudan will continue to decline for the second consecutive year with a -7.3 percent economic downswing.

High inflation and corruption slows Ethiopia's economy