By Jason McLure
(Bloomberg) — The rate of growth in Ethiopia was probably as low as 9.2 percent in the year to July 7 as electricity shortages closed factories, Prime Minister Meles Zenawi said.
The economy grew “somewhere between 9.2 percent and 10.2 percent” and will increase “at least as fast, if not faster,” in the coming year and inflation will remain in single digits, Meles said at a press conference yesterday in the capital, Addis Ababa. The government forecast growth of 11.2 percent in April and lowered that figure to 10.1 percent in June, while the International Monetary Fund estimated an increase of 6.5 percent or lower for Ethiopia during the same period.
Power shortages due to rising demand and a lack of water in the country’s dams led the state-run Ethiopian Electric Power Corp. to begin nationwide blackouts of at least twice a week in March. Outages were increased to every second day from June until last week.
Electricity cuts will end in mid-October and “won’t be a major impediment” in the coming year, said Meles. Services have increased, and while “not all factories have 24-hour service,” Meles said he was “sure every factory has a minimum” of eight hours’ supply.
Ethiopia’s trade imbalance, which led to rationing of foreign currency and shortages of imported goods like machinery parts and medical supplies last year, will ease, he said, without providing more detail.
Agricultural output will be “significantly higher” this year because of good rains during the main June to September rainy season, he said.
The Famine Early Warning System Network on July 28 said poor rains earlier this year would hinder crop production with a large swathe of the Ethiopian highlands experiencing drought.
An estimated 13.7 million Ethiopians are dependent on foreign food aid this year.
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