Economic growth better than expected

In a recently published report, Deloitte pegged Ethiopia’s GDP growth for 2021 at 6.3%, higher than the previously estimated 4.0%; no doubt that the Coffee Sector’s contribution was very important. For 2022 Growth is expected lower at 3.8%, with coffee shipments lower this year than last, we expect that the sector’s contribution will be reflected accordingly. Foreign Direct Investment for 2022 is showing an improvement on 2021, up nearly 20% during the first 9 months fiscal year 21/22 vs 20/21. Like other countries around the world Ethiopia is also importing inflation, mostly as a consequence of higher Energy and Food prices. The conflict in Ukraine which is the cause of the current inflationary pressures has also impacted Ethiopia’s food security (Ethiopia imported in 2020 USD 269 M worth of wheat) as supply is compromised. In an effort to mitigate the threat to food supplies,the Government is supporting wheat production with the aim to increase local production by 70%. Furthermore, food imports are no longer subject to Foreign Exchange controls, making it easier to import food.

Focusing on coffee trading activity over the last week, prices for Grade 5 are hovering around 200 usc/lb FOB Djibouti making them very uncompetitive so business has been slow this week. Grade 2 from the South continuous to be offered at prices above 315 c/lb FOB Djibouti.

Eritrea has once again been accused of involvement in the conflict in Tigray, for more on this pls follow the link: https://www.bbc.com/news/world/africa?ns_mchannel=social&ns_source=twitter&ns_campaign=bbc_live&ns_linkname=632beb33723a9414c98621db%26EU%20criticises%20Eritrea%27s%20reported%20offensive%20in%20Tigray%262022-09-22T06%3A27%3A37.552Z&ns_fee=0&pinned_post_locator=urn:asset:d2ef37e1-6593-4606-87b3-aa2769ae2772&pinned_post_asset_id=632beb33723a9414c98621db&pinned_post_type=share

Birr 52.56 = USD 1

Have a good weekend.