Addis Ababa October 20/2020 (ENA) Tangible measures have been taken to lower the soaring inflation in the country through various remedial mechanisms, government officials told ENA today.
Planning and Development Commissioner Fitsum Assefa, Finance State Minister Eyob Tekalign, and Senior Policy Advisor and Chief Trade Negotiator at the Prime Minister Office, Mamo Mihretu, disclosed this at a panel discussion organized by the Ethiopian News Agency.
Planning and Development Commissioner, Fitsum Assefa said tackling the rising inflation requires structural reform which the government has been dealing with in the past couple of years.
The natural disasters that the country has been facing undoubtedly have negative impacts on the stride to control and eventually lower the inflation, she added.
Though the growth registered over the past decade highly encouraged demand mainly due to public investment, it did not equally treat the supply side of the chain manufacturing.
“Thus wide gap is observed between supply and demand, even if there was real growth. Production did not increase in parallel with demand,”Fitsum noted.
She pointed out that there are many visible ways that indicate “we are going to solve the problem by identifying the push factors for the rising inflation.”
Finance State Minister, Eyob Tekalign said the existing inflation has been accumulated over the past years with an average growth of 15 percent.
“Currently Ethiopia’s worst economic foe is inflation as it knocks every home and bites at where citizens feel,” he added.
Despite the numeric differences, studies undertaken by various committees are almost similar in identifying the pushing factors for inflation, the state minister explained.
According to him, one of the major reforms introduced in the Home-Grown Economic Reform is the modernization of the entire financial sector and fiscal policy.
Eyob observed that taking loans from the National Bank of Ethiopia is risky and can essentially be considered an economic poison since it injects money that was not generated by the economy.
“That is why we bought about 33 billion Birr treasury bid this quarter of the year alone. This means we are trying to fill the deficit directly from the economy and control the inflation rather than taking money from NBE,” Eyob elaborated.
According to him, this demonstrates that the government has already started putting solutions through the Home-Grown Economic Reform, though the results can be seen in the years to come.