Ethiopia’s economy will expand by between 7 percent and 10 percent this fiscal year, missing the government’s target, as a severe drought hurts agriculture.
“The economy will continue to register growth, if not a double-digit fast economic growth,” Prime Minister Hailemariam Desalegn said in a newsletter e-mailed by the Foreign Ministry. The government had a target of 11 percent growth for the fiscal year ending on July 7.
Ethiopia, Africa’s second-most populous country after Nigeria, with almost 100 million people, said average growth has been more than 10 percent a year for the past decade, including 10.2 percent last year.
Before the effects of the drought were known, the International Monetary Fund expected the economy to expand 8.1 percent this year and said the increase for the previous 12 months was 8.7 percent.
Agricultural growth will be less than the projected 11 percent after the El Nino weather phenomenon reduced rains last year across eastern areas of the country, Hailemariam said.
Agriculture accounted for 39 percent of gross domestic product last year, according to Finance Ministry data. The drought, which is the worst in 50 years, has left almost one-fifth of Ethiopians needing food aid and 400,000 people facing severe malnutrition.
Source: bloomberg