1. Ethiopia Economic Update, November 2012 : Overcoming Inflation, Raising Competitiveness
- Author
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Geiger, Michael and Goh, Chorching
- Subjects
PRICE LEVELS ,REAL INCOME ,VALUE ADDED ,EXTREME POVERTY ,PRIVATE INVESTMENT ,WORLD TRADE ,FOOD PRICE ,INFLATIONARY PRESSURES ,GROSS FIXED CAPITAL FORMATION ,NOMINAL INTEREST RATE ,INFLATION ,NOMINAL ANCHOR ,FISCAL BALANCE ,RESERVE MONEY ,CONSUMER PRICES ,FISCAL DEFICIT ,EXPORT MARKETS ,EXPROPRIATION ,BROAD MONEY ,REGIONAL INFLATION ,SHORTFALL ,SERVICES MARKET ,INCOME ,INPUT PRICES ,NATIONAL FINANCES ,REAL INTEREST RATE ,IMPORT ,COMPETITIVENESS ,PERSONAL INCOME ,WORLD DEVELOPMENT INDICATORS ,RETURNS ,DEBT SERVICE ,CONSUMER PRICE INDEX ,CREDIT GROWTH ,PER CAPITA INCOME ,MARKET ENVIRONMENT ,CAPITAL INCOME ,RATE OF GROWTH ,HIGH INFLATION ,DOMESTIC SAVINGS ,AVERAGE PRODUCTIVITY ,CONSUMPTION BASKETS ,PRICE INFLATION ,PURCHASING POWER ,PROPERTY RIGHTS ,DEVALUATION ,ECONOMIC SITUATION ,INCOME INEQUALITY ,ELASTICITY ,MONETARY POLICY ,INDUSTRIALIZATION ,SLOWDOWN ,LIQUIDITY ,PRICE INCREASE ,DEVELOPMENT POLICY ,POVERTY REDUCTION ,PUBLIC DEBT ,LEVELS OF EXPORTS ,PRIVATE SAVINGS ,CAPITAL REQUIREMENT ,ANNUAL GROWTH ,CONSUMER PRICE INFLATION ,FIXED CAPITAL ,CURRENCY DEVALUATION ,FINANCING REQUIREMENTS ,PRICE OF GOOD ,CONSUMERS ,MARKET PRICES ,RETAIL PRICES ,SURPLUS ,WTO ,GDP ,PRIVATE PROPERTY ,TRADE BALANCE ,DISTORTIONS ,FINANCIAL PRESSURE ,INVESTMENT ACTIVITIES ,PRICE INDICES ,TAXATION ,EXPORT DIVERSIFICATION ,INCOME TAX ,EXPORTS ,EXTERNAL TRADE ,POSITIVE EFFECTS ,CURRENT ACCOUNT BALANCE ,FISCAL POLICY ,CENTRAL BANK POLICY ,EXCHANGE RATE ,INVESTMENT DECISIONS ,MARKET FORCES ,CURRENCY ,FOREIGN INVESTMENTS ,INVESTMENT RATE ,CAPITAL GOODS ,BALANCE OF PAYMENT ,DEBT FINANCING ,FINANCIAL DEVELOPMENT ,DEVELOPING COUNTRIES ,REAL GDP ,EFFECTIVE EXCHANGE RATE ,INVESTMENT PATTERNS ,MONETARY TRANSMISSION ,ECONOMIC SIZE ,GLOBALIZATION ,INCOME GROUPS ,FOREIGN INVESTMENT ,MARKET INTEGRATION ,INVESTMENT LEVELS ,COMPARATIVE ADVANTAGE ,IMBALANCE ,INCOME GROWTH ,RELATIVE PRICE ,BUDGETING ,FINANCIAL HEALTH ,INFLATION EXPECTATIONS ,PUBLIC INVESTMENT ,LEVERAGE ,TOTAL RESERVES ,TRANSACTION ,BANK POLICY ,ECONOMIC PERFORMANCE ,MONETARY CONDITIONS ,TAX ,FOREIGN INVESTORS ,BANKING SYSTEM ,ECONOMIC GROWTH ,GROSS DOMESTIC PRODUCT ,DEPRECIATION ,TRANSACTION COSTS ,PRICE DYNAMICS ,DOMESTIC MARKET ,POPULATION GROWTH ,PROPERTY RIGHTS PROTECTION ,SUBSTITUTION ,INFLATION RATE ,PRODUCTION COSTS ,COMMON MARKET ,RESERVES ,ASSETS ,GINI COEFFICIENT ,PRODUCER PRICES ,CAPACITY CONSTRAINTS ,TAX COLLECTION ,TOTAL EXPORT ,WORLD TRADE ORGANIZATION ,ECONOMIC OUTLOOK ,COMPETITIVE ADVANTAGE ,LIVING STANDARDS ,CAPITAL INVESTMENT ,FOREIGN DIRECT INVESTMENT ,TAX REFORM ,REAL EFFECTIVE EXCHANGE RATE ,TOTAL IMPORT ,TRADE DEFICIT ,WAGES ,EXTERNAL DEBT ,GOLD ,LABOR MARKET ,LOW-INCOME COUNTRY ,NATIONAL ECONOMY ,REAL INTEREST ,GDP PER CAPITA ,DEBT ,ECONOMIC EXPANSION ,DURABLE ,NATIONAL INVESTMENT ,FREE TRADE AGREEMENT ,MARKETING ,ECONOMIC DEVELOPMENT ,FINANCIAL MANAGEMENT ,CENTRAL BANK ,CONSUMPTION EXPENDITURE ,RESERVE REQUIREMENT ,AGRICULTURE ,NATIONAL BANK ,PRICE CHANGE ,FREE TRADE ,INVESTMENT CLIMATE ,INFLATION TARGET ,TARIFF INCREASES ,DEFICITS ,FOREIGN EXCHANGE ,PRIVATE BANKS ,RETAIL PRICE ,COMMERCIAL BANK ,GLOBAL TRADE ,REAL INTEREST RATES ,RESERVE ,HUMAN CAPITAL ,PRIVATE INVESTORS ,INSURANCE ,SAVINGS RATE ,CENTRAL BANK BILLS ,CURRENT ACCOUNT ,HOUSEHOLD INCOME ,CEREAL PRICE ,PRICE VOLATILITY ,MARKETIZATION ,GROWTH RATE ,ADVERSE SHOCK ,CORE INFLATION ,RESERVE ACCUMULATION ,MONETARY FUND ,CONSUMPTION GROWTH ,GOVERNMENT DEFICIT ,DOMESTIC CONSUMPTION ,NATIONAL SAVING ,CASH FLOWS ,LABOR FORCE ,SAVINGS ,RETAIL ,CONSUMER GOODS ,EXPERIENCE OF COUNTRIES ,EXPENDITURE - Abstract
Since 2004 (Ethiopian Fiscal Year (EFY) 1997), Ethiopia has experienced strong and generally broad-based real economic growth of around 10.6 percent on average between then and 2011. Growth over the last nine years was far beyond the growth rates recorded in aggregate terms for Sub-Saharan Africa (SSA), which on average only reached 5.2 percent, less than half of Ethiopia's average real gross domestic product (GDP) growth rate during that period. Inspired by the East Asian experiences for a comparison of selected indicators and policies of Ethiopia and China/Korea), growth was induced through a mix of factors including agricultural modernization, the development of new export sectors, strong global commodity demand, and government-led development investments. The initial double digits growth rates have now manifested slightly lower but remain at high single-digit levels. The economy is expected to stabilize at around seven to eight percent in 2012, largely owing to improved performance in the agriculture sector. GDP growth is likely to stay around that margin up until 2016 (EFY 2008) driven by rising foreign investment and exports (Economist Intelligence Unit 2012). High inflation persists, but is on a slightly decreasing trend. Economic growth brought with it positive trends in reducing poverty, in both urban and rural areas. Ethiopia follows a strategy of increasing exports to facilitate growth. This is appropriate given the currently limited size of its domestic market and it is consistent with the development experience of some of the recently successful countries, particularly in East Asia. Export of goods growth is to a good extent driven by volume growth across a variety of product groups, which indicates that this growth is a result of recent efforts to increase and diversify the export base. Overall export and import developments result in a significantly increased trade deficit by 43 percent, up from US$5.5 billion in 2010/11 to US$7.9 billion.
- Published
- 2012