Urgent Measures Needed to Curb Inflation Despite Good Performance in Agriculture: Expert

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Addis Ababa August 11/ 2022 /ENA/ Even if the agriculture sector registered good performance last Ethiopian fiscal year, urgent measures are needed to curb inflation, a researcher at the Ethiopian Economics Association said.

In an exclusive interview with ENA, Adem Feto, a researcher at the Ethiopian Economics Association said the agricultural sector has registered good performance despite various internal and external challenges.

Regardless of the COVID-19 pandemic, natural disaster, and climate change issues as well as  manmade problems such as internal conflicts and instability, especially in the northern and western parts of the country, the agriculture sector is in good shape and has proved as one of the better performers in the fiscal year.  

“Still the agriculture sector remains strong or vibrant. It is not affected as seriously as the industry and tourism sectors,” he noted.

According to the researcher, the shocks that affected tourism and industry sectors at the international level have not affected much the agriculture sector in Ethiopia. 

Yet, he recommended the modernization of the sector at all levels and improvement in productivity.

Adem believes that the government should have some plans to control the price of fertilizer during times like the Ukraine-Russia war.

On the other hand, inflation has become a challenge to the nation regardless of the better performances in agriculture and some positive macroeconomic indicators, the researcher  stated, adding that those with fixed incomes, the lower income segment of the society, and the majority of civil servants are highly affected by the inflation.

Therefore, he recommended price fixing, controlling artificial price tags and money supply in the market as well a balancing the money supply with the actual economic growth in the short-run.

Furthermore, productive safety-net programs and humanitarian services should be provided in some parts of the country where citizens are highly affected due to various challenges.

The researcher pointed out that increasing production and productivity, change of structure from agrarian to industry and institutional arrangements would also be crucial to resolve inflation related challenges in the long-run.