Monthly Macroeconomic Indicators for October 2009

The Monthly Macroeconomic Indicators for the Month of October, 2009

1. Inflation The annual year-on-year headline inflation stood at -3.7 percent as of October 2009 which was 59 percentage points lower than the same month of last year. Annual inflation started to decline since August 2008, the slowdown in food price inflation being the major contributor. Year-on-year food inflation reached -12.7 percent in October 2009, compared to 72.3 percent in October 2008. Meanwhile, annual core inflation was 14.8 percent in October 2009, down from 29.5 percent a year ago. On monthly basis also, inflation tended to decline. Accordingly, the monthly general, food and non￾food inflation stood at respective rates of -0.7, -1.9 and 1.1 percent by end October 2009. Meanwhile, the annual average headline inflation stood at 14.1 percent. In Addis Ababa, annual headline inflation reached 7.6 percent showing a 35.1 percentage points decrease over the same period of last year. Annual food inflation went down to 2.5 percent from 58.6 percent a year earlier. Similarly, annual core inflation rate slightly decreased to 12.6 percent from 29.4 percent in October 2008. Thus, monthly general, food and non-food inflation were 0.5, 2.5 and 1.6, respectively. All in all inflationary pressure in Ethiopia is steadily easing due to the effect of contractionary monetary policy, prudent fiscal management and other administrative measures.

2. Monetary Aggregates By the end of October 2009, broad money supply (M2) reached Birr 87.6 billion indicating an annual growth rate of 21.9 percent due to a substantial increase in net foreign assets and 11.8 percent rise in domestic credit on annual basis. Meanwhile, all types of deposit tended to increase both on monthly and annually terms during the review period except time deposit that registered a decline on monthly basis.

3. Interest rates During the month of October 2009, average lending rate of public banks stood at 9.0 percent and that of private banks at 12.25 percent. Similarly, the average savings deposit rate was 4.0 percent for public and 4.5 percent for private banks. At the same time, average time deposit rate was 4.0 percent for public and 5.17 percent for private banks. On the other hand, average demand deposit rate stood at 0.25 percent. Currently, Dashen, United and Wegagen Banks pay interest on demand deposits.

4. Treasury bills market In the month of October 2009, T-bills worth Birr 2.1 billion were supplied to the auction market against demand of Birr 2.2 billion. The average weighted yields for 28 day and 91 day T-bills slightly increased to respective level of 0.682 and 0.898 percent from 0.680 and 0.849 percent in the previous month while that of 182 day remained at 0.704 percent.

5. Inter-bank money market No inter-bank money market transaction took place during the month.

6. Re-discount window facility No bank applied to access this facility during the review month.

7. Exchange rates Average foreign exchange rate in the inter-bank forex market reached Birr 12.5522/USD in October

8. The monthly and annual rates of depreciation of the Birr against USD were 0.23 and 28.8 percent, respectively. Meanwhile, the parallel market rate stood at Birr 13.32/USD. As a result, the premium between the inter-bank and parallel markets went up to 6.1 percent from 5.2 percent in the previous month.

9. External Trade In the review month, total value of exports amounted to USD 118.6 million, or 28 and 39 percent higher compared to the previous month and a year ago, respectively. Similarly, imports of merchandize goods went up by 54 and 20.7 percent to reach USD 851.5 million in contrast to USD 552.3 million last month and USD 705.4 million in October 2008. Thus, monthly merchandise trade deficit widened by 60 percent.

10. Composition of the Financial Sector In the review month, the total number of banks, insurance companies and MFIs stood at 15, 12 and 30, respectively. The total number of bank branches reached 663 from 656 in September 2009. Similarly the number of insurance branches reached 200 from 196 and total number of forex bureaus increased from 310 to 311 during the review period.

11. Banking Operations The amount of new loans disbursed by the banking system reached Birr 2.8 billion, about 42 percent higher than that of same period of last year. Similarly, loan collection by the banking system increased by 24 percent to Birr 1.8 billion. As a result, outstanding loans of the banking system reached Birr 48.2 billion, up by 12.3 percent against the preceding year same period.

12. Summary and Conclusion The available macro-economic indicators during the review period indicated continued slowdown in inflation, moderate growth of money supply, steady depreciation of the Birr in the inter-bank market, widening merchandize trade deficit, moderate T-bills market, inactive money market and increased new loan disbursement by the banking system.

SELECTED MONTHLY MACROECONOMIC INDICATORS Sr. No Indicators Oct￾08 Dec￾08 Mar￾09 Jun￾09 Sept￾09 Oct￾09 1 Inflation a) Addis Ababa

• Month on month 1.9 -2.9 1.1 0.2 3.6 0.5
• Year-on- year 42.6 34.5 20.8 7.3 9.1 7.6
• Average annual 29.4 33.5 34.5 29.4 20.4 17.6 b) National
• Month on month -1.1 -5.8 0.1 1.4 0.9 -0.7
• Year-on- year 55.4 39.3 23.7 2.7 -4.1 -3.7
• Average annual 40.3 44.4 45.2 36.4 18.7 14.1 2 Investment1

a) Projects approved 1966 1761 1712 NA b) Capital investment size (in mn. Birr) 28,510 .3 28,420 .2 14224 9.98 NA c) Potential employment creation

• Permanent 73702 13527 1 82418 NA
• Temporary 16725 8 13145 7 18407 1 NA 3 Average Lending Rates (%)
• Public banks 9.0
• Private banks 11.50 11.50 12.25 4 Average Deposit Rates (%)** a) Saving deposit
• Public banks 4.00
• Private banks 4.08 4.08 4.50 b) Time deposit
• Public banks 4.00
• Private banks 5.59 5.60 5.39 4.95 5.13 5.17 c) Demand deposit -Public banks 0.00 -Private banks 0.19 0.23 0.25 0.25 5 Inter- bank Money Market

Rate (in%) 6 Treasury Bill a) 28 day

• Average weighted price (for 100 Birr) 99.96 99.95 99.95 99.93 99.95 99.95
• Average weighted yield (%) 0.55 0.63 0.68 0.92 0.68 0.68 .-Supply 280 340 330 .-Demand 1032 1560 990 890 1290 660 Satisfied demand 27.13 21.79 33.33 37.08 25.58 50.00 b) 91 day
• Average weighted price (for 100 Birr) 99.80 99.78 99.75 99.75 99.74 99.79
• Average weighted yield (%) 0.80 0.87 1.01 1.00 1.03 0.85 .-Supply 1004 2432 1634 2560 1866 1691 .-Demand 1784 4789 3386 4160 2216 2041 Satisfied demand 56.28 50.78 48.25 61.54 84.21 82.85 c) 182 day
• Average weighted price (for 100 Birr) 99.69 99.67 99.72 99.65 99.72 99.65
• Average weighted yield (%) 0.62 1.01 0.56 0.70 0.56 0.70 .-Supply 1350 1216 1255 1100 1120 678 Sr. No Indicators Oct￾08 Dec￾08 Mar￾09 Jun￾09 Sept￾09 Oct￾09 .-Demand 702 1140 1120 1400 1320 728 Satisfied demand 192.31 106.67 112.05 78.57 84.85 93.13 7 Budget Deficit (in mn. Birr)1 1489.0

5039.0 1344.0

2472.8 a) Revenue and grants 11279. 0 7188.0 12989 10161. 4 b) Expenditure* 9790.0 12227. 0 11645 12634. 2

• Recurrent 2229.0 2073.0 3227 2434.3
• Capital 3186.0 6003.0 4212 6275.5
• Regional transfers 4375.0 4151.0 4206 3924.4 8 Monentary Aggregates (in mn. Birr)

8.1 Broad Money 71,888 75,904 80,596 82,509 87,155 87,601

.79 .03 .83 .75 .52 .95 a) Monthly change (%) 0.6 2.2 2.5 0.2 1.3 0.5 b) Annual change (%) 21.0 24.1 22.6 21.0 22.0 21.9 8.2 Narrow Money Supply 37,273 .03 40,382 .41 42,921 .39 42,112 .66 43,838 .94 43,893 .01

• Currency outside banks 15,974 .20 17,432 .87 19,432 .10 19,715 .01 18,547 .21 18,829 .78 a) Monthly change (%) -2.2 7.1 2.3 1.5 -1.8 1.5 b) Annual change (%) 24.7 20.7 15.9 11.7 13.5 17.9
• Demand deposits (net) 21,298 .83 22,949 .54 23,489 .29 22,397 .64 25,291 .73 25,063 .23 a) Monthly change (%) 3.2 0.7 2.2 -2.9 3.2 -0.9 b) Annual change (%) 23.7 37.8 34.5 26.6 22.6 17.7 8.3 Quasi-Money 34,615 .75 35,521 .62 37,675 .45 40,397 .09 43,316 .58 43,708 .95
• Saving deposit 31,726 .85 32,543 .78 34,626 .68 37,148 .72 39,814 .53 40,320 .32 a) Monthly change (%) 0.8 0.9 3.2 1.7 1.7 1.3 b) Annual change (%) 23.7 23.7 24.4 26.0 26.5 27.1
• Time deposit 2,888. 90 2,977. 84 3,048. 76 3,248. 37 3,502. 06 3,388. 63 a) Monthly change (%) -3.7 1.7 -1.7 -1.2 2.4 -3.2 b) Annual change (%) -22.4 -20.6 -16.5 -3.2 16.7 17.3 8.4 Reserve Money (in mn. Birr) 36,411 .85 39,803 .43 41,331 .40 45,107 .02 46,894 .41 45,002 .24 a) Monthly change (%) 1.8 4.9 0.4 4.4 3.6 -4.0 b) Annual change (%) 31.4 38.1 38.2 26.9 31.1 23.1 8.5 Net Foreign Assets 9,440. 48 9,000. 98 13,346 .65 16,744 .34 20,839 .17 20,862 .31 a) National Bank of Ethiopia 4,588. 99 6,137. 41 9,571. 56 11,833 .66 16,755 .30 16,515 .61 b) Commercial banks 4,851. 49 2,863. 57 3,775. 09 4,910. 68 4,083. 87 4,346. 71 8.6 Banking statistics(in million.Birr)4

a) Disbursement 1968.6 2339.4 2047.8 1624.1 1982.8 2804.6 b) Collection 1502.5 1723.9 1858.3 2879.0 1816.4 1863.2

c) Outstanding credit of the banking system 42915. 8 44193. 4 45836. 8 46004. 7 46725. 7 48214. 6 9 Total Net Domestic Credit (in mn. Birr) 81,517 .51 85,327 .66 85,269 .06 89,203 .04 91,983 .69 91,159 .36 a) Government 31,447 .2 31,944 .4 29,349 .1 32,786 .5 32,500 .4 29,785 .6 b) Other sectors 50,070 .3 53,383 .3 55,920 .0 56,416 .5 59,483 .3 61,373 .8 10 Structure of Financial System

10.1 Number banks2 13 14 15

• Public 3
• Private 10 11 12 Total number of bank branches 587 596 617 636 656 663 10.2 Number of forex bureaux 289 293 302 309 310 311 Sr. No Indicators Oct￾08 Dec￾08 Mar￾09 Jun￾09 Sept￾09 Oct￾09 10.3 Number of insurance companies 10 11 12
• Public 1
• Private 9 10 11 Total number of insurance branches 175 175 190 194 196 200 10.4 Number of micro￾financing institutions 30 29 29 30 11 Reserve and liquidity ratio of the Banking System(in mn.Birr)

11.1 Actual reserves 15,839 .2 17,221 .8 18,186 .4 19,569 .4 22,893 .0 21,315 .2 11.2 Excess reserves 5,803. 1 6,609. 8 6,906. 8 8,386. 0 10,660 .3 8,927. 9 11.3 Liquidity ratio (in percent) 40.1 39.6 41.2 44.4 46.5 43.4 12 Export and Import (In mill.USD)

12.1 Total Import 705.38 621.18 606.46 718.48 552.26 851.54 12.2 Total Export 85.98 82.76 135.90 139.37 92.65 118.61 12.3 Coffee Export

12.3.1 Sales value (in mn. USD) NA a) Dry coffee sales value NA b) Washed coffee sales value NA 12.3.2. Sales volume (in Mn Kg) NA a) Dry coffee sales volume (in Mn Kg) NA b) Washed coffee sales volume (in Mn Kg) NA 12.4 ICO 1976 composite USC/LB 108.31 103.07 105.87 119.05 116.4 121.09 13 Exchange Rates 14.1 Average official exchange rate (Birr/US Dollar) 9.7456 9.9409 11.082 11.265 4 12.522 7 12.552 2 14.2 Average parallel market exchange rate (Birr/US Dollar) 10.516 11.083 13.235 0 13.153 1 13.180 0 13.320 0 Note: 1 Since monthly data is not available figures are quarterly 2 Includes DBE 3 Includes lending to central government in the form of treasury bills and government bonds and excluding DBE 4 The figure for the last month is estimate for DBE

• Data are available on quarterly basis ** The Deposit rate for time and demand deposits is weighted mean after September 2003.