IMF hails economic performance

The International Monetary Fund (IMF) has welcomed Ethiopia’s economic performance but warned of the food crisis that has hit the country. Shigemitsu Sugisaki, the deputy managing director on the executive board of the IMF, said that real growth remained strong in the economy. He was speaking after the third review of Ethiopia under the three-year Poverty Reduction and Growth Facility (PRGF) deal. “Ethiopia's performance during the first annual program under the PRGF arrangement was good, and the second annual program remains on track," he said. “Real GDP growth remained strong at an estimated five percent in 2001/02, while inflation remained negative as a result of food surpluses following the bumper crop in 2000/2001. “However, since July of 2002, Ethiopia has suffered from a drought, which is affecting food production and causing food shortages in some regions, as well as a rebound in cereal prices," Sugisaki warned. “The authorities have subsequently requested additional food assistance from donors,” he added. The PRGF loans are repayable over 10 years with five years' grace. The interest on the loans is 0.5 percent. This now means Ethiopia has access to a further US $14 million for development. So far Ethiopia has used US $77 million of US $133 million.