The Federal Democratic Republic of Ethiopia - 2004 Article IV Consultation and Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility--Staff Report; Staff Statement; And Public Information Notice and Press Release on T (Electronic book text)

1. Ethiopia has faced a turbulent external economic environment of late, as commodity price movements and, later, global recession produced a series of shocks to the balance of payments. Rapid import growth, fueled in part by public spending, created pressure on reserve levels even prior to the surge in world food and fuel prices in 2007-08. The price surge then helped push reserves down to some $0.9 billion (1.2 months of imports) by mid-2008, while also contributing to an exceptional jump in consumer price inflation.