July 12, 2011 / 4:24 PM / in 7 years

UPDATE 1-Ethiopia inflation reaches 38 pct in June

* Food main driver of the rise in rate

* Surging prices a challenge for much of Africa

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ADDIS ABABA, July 12 (Reuters) - Ethiopia’s inflation rate hit 38 percent in June, up from 34.7 percent in May, driven by higher food prices, the statistics office said on Tuesday.

The Central Statistics Agency attributed the jump to a rise in the prices of wheat, maize, barley, meat and potatoes among other items.

“Year-on-year food inflation has increased by 45.3 percent in June 2011 as compared to June 2010,” the agency said in a statement.

Rising inflation has been a common problem for economies in the east and horn of Africa this year, as poor rains have affected farming and as oil prices have surged.

Ethiopia is poised for 7.5 percent economic growth this year, according to the International Monetary Fund, which says surging inflation is Ethiopia’s main macroeconomic challenge. (Reporting by Aaron Maasho; Writing by Duncan Miriri; Editing by Susan Fenton)

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