IMF Raises Ethiopian Growth Forecast to 7% for Next Two Years

The International Monetary Fund raised its growth forecasts for Ethiopia this year and next, and said inflation in Africa’s second-most populous nation may fall below 10 percent next year.

The economy may expand 7 percent in the fiscal year to July 7, compared with an April estimate of 5 percent, the Washington- based lender said in an e-mailed statement today. Growth in the 2012-13 fiscal year may be 7 percent, against a prior forecast of 5.5 percent, it said.

“A similar growth rate and single-digit inflation are achievable in 2012-13 if implementation of tight monetary and fiscal policies is maintained,” it said.

Inflation that was 25.5 percent in May is expected to reach 22 percent by the end of the fiscal year, the IMF said.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net