Ethiopia’s Inflation Soaring to 22.3 Percent, Food Prices Unbearable for Millions

Borkena

August 11, 2020

Ethiopian Central Statistical Agency said that Ethiopia’s inflation rate reached 22.3 percent in July 2020. It has been increasing for three consecutive months, as reported by the VOA Amharic service on Tuesday.

An increase in the price of food, up to 23.7 percent at times, is said to be the major factor in the new high inflation rate. Compared to the inflation rate last year, this year’s is up by 24.9 percent according to the Central Statistical Agency report.

The ministry of agriculture attributes the increase in prices of food items to the problem in the market chain rather than a supply problem.  During the production year, there was a plan to cultivate 1.9 million hectares of land and the ministry claims that over 2.1 million hectares are cultivated. The problem in the supply chain is due to price gouging by “greedy businessmen” as the ministry calls them.

VOA Amharic spoke to Bisrat Teshome, an economist, and he said that baseless speculation in the supply-chain is responsible for the price hikes on food items.

According to economists, devaluation of the Ethiopian currency has also played a part for the rising inflation and price hike of food items.

As is the case always, the burden of price inflation is too heavy on low income earning families and individuals. Prices of vegetables, cereals, and grains have been unaffordable for that section of the population, the bigger component of the Ethiopian population.

In the ending budget year, the government pledged to bring the inflation rate to a single-digit. However, the goal has not been achieved yet, and price inflation continues to rise. Economists advise the government to work on fixing supply-chain problems so that producers and consumers could have direct access.