June 17, 2010 / 1:18 PM / 9 years ago

Ethiopia's May inflation quickens to 7.4 percent

Ethiopian police stand guard on a road from the airport in the capital Addis Ababa January 28, 2007. REUTERS/Antony Njuguna

ADDIS ABABA (Reuters) - Ethiopia’s year-on-year inflation rate rose to 7.4 percent in May, up from 6.8 percent in April due to higher food, fuel and construction material prices, its statistics office said on Thursday.

“Except for cereals, all the other food components have shown a rise in their indices,” the Central Statistical Agency said in a statement. “Among non-food components almost all of them are increasing; the prices of fuel, construction materials, clothing and footwear and furniture are on the rise.”

Inflation surged to 64.2 percent in July 2008, driven by record food and fuel prices, before a period of falling prices from July to October last year after the government halted state borrowing and increased bank reserves.

The IMF said earlier this month that Ethiopia had been successful in implementing policies to curb inflation and rebuild external reserves as agreed under an Exogenous Shocks Facility-supported programme.

The Horn of Africa nation, a growing destination for foreign investment, this month proposed a $5.7 billion budget that targets infrastructure development as part of efforts to maintain an annual growth rate of more than 10 percent.

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