August 16, 2010 / 8:25 AM / 9 years ago

Ethiopia July inflation slows as food prices dip

A woman shops at a supermarket in Nairobi, Kenya, October 23, 2008. REUTERS/Antony Njuguna

ADDIS ABABA (Reuters) - Ethiopia’s year-on-year inflation rate slowed to 5.7 percent in July from 7.3 percent in June, helped by easing food prices, official data showed on Monday.

“The food index showed a decline of 1.5 percent,” the Central Statistical Agency (CSA) said on its website.

Non-food prices generally increased. “The prices of construction materials, clothing and footwear, furniture and personal care products are on the rise,” the CSA said.

Ethiopia was hit by soaring inflation in 2008 and much of 2009, driven by record global food and fuel prices.

The rate plummeted from July 2009 to October 2009 after the government stopped state borrowing and increased bank reserves.

Prime Minister Meles Zenawi says his government will target annual inflation of 6 percent over the next five years.

The Horn of Africa nation last week unveiled a five-year economic plan that predicts average growth of between 11 and 14.9 percent.

Ethiopia, keen to attract foreign investment in agriculture and mineral exploration, last month passed a $5.7 billion budget that includes heavy investment in infrastructure.

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