The Ethiopian Economic Association (EEA) recommended setting up a supply and price stabilization board as an immediate reform measure to stabilize the inflation and cost of living
The association in its press conference entitled “The Ethiopian Economy structural constraints, inflation, and policy options” presented that the roles of the board are to manage domestic and import supply, stabilize the inflation, and coordinate sectors and activities among others.
Presenting the study, the association’s director of research and policy, Dr. Degye Goshu, said that the main contributors to inflation are a shortage of supply goods, a lack of economic good governance, a serious shortage of imports, increase import trade tariffs, and violence and conflict.
According to the study, the country’s declining productivity and the leading of the service sector in the economy indicate the country’s economic structural problem. He further said interest rates on deposits and interest rates on loans do not take into account the overall economic situation, exacerbating inflation.
The association’s chief executive, Prof. Mengistu Ketema, on his part said the war between Russia and Ukraine has severely affected our country in terms of food, fuel, and fertilizer products.
The study offers short-term recommendations to address current inflation and the cost of living. In addition to selected basic foods, the government should allow Franco Valuta for pharmaceuticals and selected construction, agricultural, and industrial inputs.
Moreover, reasonable trade tariffs, a positive interest rate that takes the inflation into account, and controlling domestic violence and conflict are some of the immediate measures that need to be considered to stabilize the inflation and cost of living.
Different media including Addis Chamber TV were attending the press conference.