Country Report Ethiopia November 2009

Outlook for 2010-11

• The ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) is expected to remain firmly in power over the forecast period.
• Political tensions will rise during the run-up to the May 2010 federal and regional elections, as all parties begin campaigning. The EPRDF is expected to win comfortably.
• 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.
• Real GDP growth is forecast to slow to 7% in 2009/10 (ending July 7th), as exports and remittances recover slowly from the global recession, before rising to 8% in 2010/11, driven by continued global growth and reform efforts.
• Inflation is forecast to rise slightly in 2010, to 12%, as food prices rise owing to patchy rains for the 2009/10 main harvest. Tight fiscal and monetary policy and stable international commodity prices will help to reduce inflation to 9% in 2011.
• The current-account deficit will narrow to 6.9% of GDP in 2010, as exports and private transfers begin to improve. In 2011 the current-account deficit is expected to narrow further, to 6.3% of GDP, as economic growth increases.

Monthly review

• The National Election Board of Ethiopia has issued a draft timetable, with voting provisionally scheduled to take place on May 24th.
• The ruling EPRDF, the Ethiopian Democratic Party, the All Ethiopian Unity Organisation and the Coalition for Unity and Democracy have signed an electoral code of conduct for the May elections.
• The uncertain outlook for this season's key meher harvest (reaped in the fourth quarter) has led the government to appeal for emergency aid, requesting food and non-food assistance worth US$175m.
• The World Bank has approved funding of US$480m for the third phase of the government's Productive Safety Net Programme, which runs until June 2015.
• The Ethiopian Commodity Exchange (ECX), a public-private partnership, has expanded its coverage of traded commodities—wheat, beans, maize and coffee—to include sesame and peas.
• An Egyptian conglomerate, Elsewedy International, has inaugurated a new US$40m electric-cable factory at Dukem, 35 km east of Addis Ababa.
• The central bank's latest quarterly report shows that Ethiopia's current-account deficit amounted to US$255m in the first quarter of 2009, 26% lower than a year earlier, owing to rising inflows from services and current transfers.

This report covers the following industry codes:
SIC Code: 1;49;39;37
NAICS Code: 11;22;31;336