Country Report Ethiopia December 2008

Summary

The Economist Intelligence Unit expects the ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) to remain firmly in power over the forecast period.
Political tensions will begin rising during 2009, as all parties start to regroup and plan for the next general election, due in May 2010.
Relations with Eritrea and Ethiopia's involvement in Somalia will continue to dominate the foreign policy agenda throughout the forecast period, and tensions in the region will remain high.
Sustained growth in agriculture, horticulture and services will keep real GDP growth robust, at 7.5% in 2009 and 7% in 2010, supported by healthy inflows of donor aid and foreign direct investment.
Inflation is estimated to average 46% in 2008, reflecting continued strong, albeit slowing, increases in food and oil prices. Monetary tightening and lower food and oil prices should bring the rate down to 15% in 2009 and 12% in 2010.
The current-account deficit is forecast to widen to 6.7% of GDP in 2009, as rising imports offset gains in exports. In 2010 gains on the services and current transfers accounts should narrow the deficit slightly, to 6.6% of GDP.

The prime minister, Meles Zenawi, carried out a significant cabinet reshuffle on October 30th, sacking or switching several key ministers.
The authorities launched a major crackdown on suspected Oromo rebels in November, arresting about 100 people.
Ethiopia now says that it will withdraw its forces from Somalia by the end of 2008, two years after entering the country to support the Transitional Federal Government.
With the government trying to fund spending of Birr54.3bn (US$5.5bn) in fiscal 2008/09 (ending July 7th), new efforts are being made to improve tax collection.
In a boost to the government, the World Bank officially launched Ethiopia's new Country Assistance Strategy (CAS) in November, covering the period from July 2008 to June 2011.
Private banking continues to grow in Ethiopia, and the country's eight local private banks accounted for 43% of total bank lending of Birr27.3bn (US$2.9bn) in 2007/08.
Ethiopia's coffee exports jumped by 24% to an estimated US$525m in 2007/08, the highest for several years, according to provisional figures.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;49;20
NAICS Code: 52;22;311