Ethiopian inflation dropped in December to 12.9 percent

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Addis Ababa, January 11, 2013 (WIC) - The government had targeted single-digit inflation in 2012, but it didn’t happen though it was in decline.

Inflation peaked at 36.3 percent last February, and was a major economic challenge. It has steadily declined for some time now due to rising agricultural output and government subsidies on a number of food items.

According to the Central Statistics Agency, last month's year-on-year inflation fell to 12.9 percent from 15.6 percent in November.

The figures indicate the consumer price index fell by 0.7 percent month-on-month in December which is more than a 0.5 percent drop in November.

As for the Agency food price inflation fell to 11.8 percent year-on-year in December, down from 13.4 percent in November. The non-food inflation rate also dropped to 14.6 percent in December from 19.4 percent the previous month.

The International Monetary Fund said inflation is the biggest challenge facing policymakers in the country, which has however registered one of the world's fastest economic growth rates for little less than a decade.

Ethiopia's economy is expected to maintain a growth rate of 11 percent in 2012/2013.