ETHIOPIA’S economy will expand by between 7% and 10% this fiscal year, missing the government’s target, as a severe drought hurts agriculture.
“The economy will continue to register growth, if not a double-digit fast economic growth,” Prime Minister Hailemariam Desalegn said in a newsletter e-mailed by the Foreign Ministry.
The government had a target of 11% growth for the fiscal year ending on July 7.
Ethiopia, Africa’s second-most populous country after Nigeria, with almost 100 million people, said average growth has been more than 10% a year for the past decade, including 10.2% last year. Before the effects of the drought were known, the International Monetary Fund (IMF) expected the economy to expand 8.1% this year and said the increase for the previous 12 months was 8.7%.
Agricultural growth will be less than the projected 11% after the El Nino weather phenomenon reduced rains last year across eastern areas of the country, Hailemariam said. Agriculture accounted for 39% of gross domestic product (GDP) last year, according to Finance Ministry data.
The drought, which is the worst in 50 years, has left almost one-fifth of Ethiopians needing food aid and 400,000 people facing severe malnutrition.