Country Report Ethiopia January 2009

Outlook for 2009-10

• The ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) is expected 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, which is due in May 2010.
• Relations with Eritrea and insecurity 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 steady inflows of donor aid and investment.
• Inflation is estimated to have averaged 45% in 2008 owing to strong increases in food and oil prices during the year. 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 narrow to 6.1% of GDP in 2009 as falling oil and food import costs offset falls in current transfers. In 2010 rising oil prices will offset growth in remittances, giving a deficit of 6.2% of GDP.

Monthly review

• In mid-December the Ethiopian authorities arrested Birtukan Mideksa, the leader of the Unity for Democracy and Justice (UDJ) opposition party.
• Ethiopia's parliament has passed a controversial bill that will severely restrict the activities of non-governmental organisations currently operating in the country.
• Ethiopia's education system is poised to benefit from a large infusion of donor funding, worth at least US$400m, over the next eight years.
• Inflation is declining rapidly in Ethiopia as food prices fall from high levels, helped by the gathering of this season's main harvest and lower global prices.
• The state-owned Ethiopian Electric Power Corporation has awarded contracts to two firmsEnergoinvest (Bosnia) and Sunir (Iran)for the construction of an interconnection to Sudan for eventual electricity exports.
• Ethiopia remains in the grip of power shortages because of delays in the construction of two new hydroelectric dams, restraining economic growth.
• Ethiopia's exporters and importers are experiencing a rise in transaction costs after Dubai Port World, the operators of Djibouti port, raised handling, storage and utility tariffs by 15-25% on December 1st.

Source: Country Report

This report covers the following industry codes:
SIC Code: 82;49;47
NAICS Code: 61;22;48

This report covers the following industry codes:
SIC Code: 82;49;47
NAICS Code: 61;22;48