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Ethiopia’s Struggle with Hyperinflation: A Year of Progress
Ethiopia has been facing a significant challenge with hyperinflation in recent years, leading to economic hardships for many citizens. However, recent data from the National Bank of Ethiopia suggests that there may be some relief on the horizon.
According to the National Bank of Ethiopia, inflation in the country has dropped by nearly 10 percent over the span of a year. This decrease is attributed to targeted efforts by the government to address the issue. In June 2024, the inflation rate was reported to be 19.9%, down from 29.3% the previous year.
The National Bank of Ethiopia credited this decline to the implementation of various monetary policy stances and supply-side measures aimed at increasing output. Additionally, recent policy changes introduced by the National Bank to regulate the banking sector have been said to align with international best practices, signaling a step in the right direction.
The Ethiopian government has been under pressure to address the issue of hyperinflation as millions of working Ethiopians struggled to make ends meet. The Central Statistical Agency reported an inflation rate of 28.3% in December 2023, highlighting the severity of the problem.
One of the key indicators of the country’s economic challenges is the exchange rate of the US dollar to the Ethiopian birr. Currently, $1 is equivalent to about 57.7 Ethiopian birr in the official exchange rate, while the black market rate is almost double at 120 Ethiopian birr.
While these developments show some progress in addressing hyperinflation, it is clear that Ethiopia still has a long way to go to stabilize its economy and improve the living standards of its citizens. With continued efforts and strategic interventions, the country may be able to overcome its economic challenges in the near future.
For more information, visit the National Bank of Ethiopia’s official website.
