Country Report Ethiopia October 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 election as all parties begin campaigning for the general election. The EPRDF is expected to win the election 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 owing to continued global growth and reform efforts.
• Inflation is forecast to rise slightly, to 12%, in 2010 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 it 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 executive council of the EPRDF decided in September that the prime minister, Meles Zenawi, would stay on as party leader to fight the 2010 election and remain in post until the subsequent election in 2015.
• In September a new opposition coalition??