Ethiopia’s economy will grow 10 percent in the fiscal year through June, helped by a “good” agricultural harvest, Finance Minister Sufian Ahmed said.

Growth in the African country averaged 11.2 percent in the last five years, Ahmed told reporters at a conference in Cairo on Sunday. He said the economy will probably expand more than 8 percent in the fiscal year starting July 1.
“The source of growth in Ethiopia is mainly agriculture,” he said. “We had a good harvest, a good rainy season for this year.”
Ethiopia nevertheless cannot weather the financial crisis without foreign aid that would help farmers import necessary capital goods, Ahmed said. The International Monetary Fund said on May 25 it will discuss granting Ethiopia credit of as much as $250 million in the next few weeks to help the country cope with the global recession.
“Our weakest link is in the foreign exchange,” he said. “All those growers require huge imports for capital goods. So we need external assistance in the form of foreign currencies.”
Ethiopia’s foreign exchange reserves fell to $850 million last year -- enough to cover only one month’s imports, Sukhwinder Singh, director of the IMF Ethiopia office said. They have since risen to about $1.2 billion, he added.
The Ethiopian minister said inflation may ease to between 8 percent and 9 percent in the next fiscal year, from the current rate which stands at around 20 percent. He said inflation would probably ease to around 15 percent in the current fiscal year through June.
(Source: Bloomberg)