Ethiopia set to register 10.8 percent growth: PM
Meles
Addis Ababa, March 18, 2008
- Prime Minister Meles Zenawi announced that Ethiopia is
set to register a 10.8 percent economic growth this
budget year that makes it score an over 10 percent
economic growth for five years in row.Presenting his report to the 18th regular session of the House of Peoples' Representatives on Tuesday, Prime Minister Meles said that sustaining the fast economic growth the country is registering as well as increasing the export trade by 25 percent were the two clear goals the government set for the current budget year.
Meles said that available evidences indicate that the country's economy will grow at no less than 10.8 percent, while the 32 percent growth scored in the export trade over the past eight months proves that the goal set for the year will be achieved successfully.
While the economic development is encouraging, worsening inflation has created a difficult situation for the low income urban dwellers, he noted.
The significant price rise in the global market of various items particularly that of oil, food grains, steel and cement is one of the main causes of the current inflation, he said.
To withstand the impact of global inflation, the country's economy has to grow rapidly and thereby increasing the income of the population, Meles said.
“It is with this conviction that the government has given priority to efforts aimed at realizing rapid economic growth and increasing the income of the population including that of civil servants,” he added.
The government, along with efforts being made to expedite sustainable solutions, has devised and has been implementing temporary measures including provision of direct and indirect subsidies, Meles said.
In the last few years the government spent 3.52 billion Birr to subsidize fuel and 372 million Birr on wheat, the Premier said.
Since the inflation is not yet stabilized as much as excepted, the government will continue this policy and even have to expand it in some areas.
A decision has been made to continue the policy of step-by- step alignment of the local fuel prices to the world market, rather that transferring the global increase immediately to the local consumer, the Premier noted.
The government has also decided to lift the Value Added tax (VAT) and Turn-Over Tax on grains as of march 19, 2008, Meles announced.
In addition to the increase in commodity prices in the international market, the significant increase in circulation of money and the deficiencies in the marketing system are two domestic reasons that exacerbate the inflation, Meles said.
Meles said that efforts to address inflation arising from the backward and cumbersome agriculture marketing system will include modernizing the system and transforming it structurally through speedy implementation of the commodity exchange centre.
The government will also expand and strengthen measures to make available additional basic consumer goods at affordable prices, he said.
The government will take strong legal measures to tackle problems being created by illegal business people, while a task force comprising members of pertinent government bodies has been set up to permanently monitor illicit activities and take legal measures as necessary.
The country's general economic growth as well as the export trade growth is achieving satisfactory results, Meles said and added that controlling inflation will not take too long.
Meles affirmed to the house that the government would take decisive and effective measures in order to crush inflation which he said is public enemy number one.
The Premier during the session gave replies to questions raised by members of the house.
ENA
