The Federal Democratic Republic of Ethiopia and the IMF
Press Release: IMF Completes Sixth Review Under Ethiopia's Poverty Reduction and Growth Facility Arrangement
September 13, 2004
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The Federal Democratic Republic of EthiopiaLetter
Mr. Rodrigo de Rato
Dear Mr. de Rato:
In accordance with the provisions of the three-year arrangement (approved on March 22, 2001), under the Poverty Reduction and Growth Facility (PRGF), the Government of Ethiopia, in cooperation with staff of the IMF, has evaluated the implementation of the third annual program (July 8, 2003-July 7, 2004); performance is to be measured through end-March 2004. Following the completion of the sixth review under the PRGF arrangement by the Executive Board, the government requests the seventh disbursement in an amount equivalent to SDR 10.429 million under the arrangement.
In 2003/04, real GDP is provisionally estimated to have increased by 11.6 percent, mainly reflecting a sharp recovery in agricultural output, which grew by 18.9 percent. Inflation is estimated to have fallen to 12.1 percent in the 12 months to April 2004. All the quantitative performance criteria for end-March 2004 and the structural performance criteria for end-June 2004 have been met (Tables 1 and 2), and we believe that the current stance of macroeconomic policies remains fully consistent with achieving all the quantitative and structural benchmarks for end-June 2004. We will be reporting to you on the performance relating to the benchmarks for April-June of fiscal year 2003/04 by end-August, 2004.
The government wishes in particular to stress that it is continuing in its efforts to maintain budget discipline, to develop a public debt strategy which will set public debt on to a sustainable path, and to continue to reorient public spending in favor of poverty-related expenditures as envisaged in the PRSP.
The government believes that its policies are adequate to achieve the objectives of its program, but it will take any further measures that may become appropriate for this purpose. Ethiopia will consult with the Fund on the adoption of these measures, and in advance of revisions to its policies, in accordance with the Fund's policies on such consultation.