Ethiopia: Updated Inflation Forecasts

Dick Durevall and Josef Loening

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of this section is to simulate possible policy scenarios and thus predict the CPI over June 2009 to December 2010 for illustrative purposes. The empirical models are based on Loening, Durevall and Birru (2009). Although highly tentative, our scenarios show that inflation will decrease substantially though inflation inertia may prevent a rapid stabilization of food prices. One of the main driving forces behind domestic inflation is agricultural output growth. While exchange rate and monetary policies can make a significant difference, it is crucial to take into consideration the development of the domestic cereal market. If international prices would start increasing again, they would to have a strong impact on Ethiopia, and the model predictions will not be valid.

Keywords: Inflation; Forecast; Ethiopia (search for similar items in EconPapers)
JEL-codes: E31 E37 O55 (search for similar items in EconPapers)
Date: 2009-06-06
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