Ethiopian Prime Minister Hailemariam Desalegn on Thursday said the country’s economy remains healthy and strong amid poor performance of the export trade, with El Nino-induced food crisis in some parts of the country.
Presenting the six- month performance report of the government to the national parliament, Prime Minister Hailemariam said the country’s economy has been performing well with better achievement in the construction, manufacturing and service sectors.
The premier however said the El Nino-induced drought and poor performance of the export trade have over-shadowed the economic growth of the country and that the intended 11 percent economic growth rate for the Ethiopian fiscal year may not be fully achievable.
“Even though it is too difficult to perfectly forecast the performance of the economy after six months, the prevailing situation reveals that the country will continue to register fast economic growth but may not be able to register the set target of11 percent economic growth rate conditions,” he said.
Some 5.3 billion US dollars have been generated from the export trade in the first half of the fiscal year. However, the performance is low compared to the plan due to the global financial crisis and less contributions from the manufacturing sector, he said.
“In contrast, Ethiopia imported 8.3 billion US dollars-worth of goods, showing a wide gap between the import and export trade. Hence, in order to ease foreign exchange shortage, the government utilized the foreign currency secured from money transfer, foreign direct investment (FDI) and from its deposit,” Hailemariam said.
The government collected 65 billion birrs from tax, showing a 10.8 per cent increase compared to the same period the previous year, the Premier stated, adding that in general, the country’s economy has continued to be healthy. He told the MPs that inflation remained at 10 percent on average during the past six months, which is the lowest after 14 months.
The Prime Minister added that the target to raise gross domestic savings to more than 22 percent will be achieved following the expansion of banking services and improvement in savings for the housing program and sale of Grand Ethiopian Renaissance Dam (GERD) bonds.
The Prime Minister said the government has spent over $380 million to withstand the El Nino-induced drought in some parts of the country, though the response of donors was slow and minimal.
“In an effort to tackle the impacts of the drought, the government has taken the lead role and spent over $380 million for emergency response. We are grateful for the support donors extended to us though the response was extremely slow and minimal,” he added.