Headline inflation, an indicator of the cost of living, showed a two-percentage-point rise in June, reaching 21.6pc, according to the latest Consumer Price Index from the Central Statistical Agency (CSA).

The rate has been revolving around 21.8pc and 22.9pc in the last five months, registering the highest value in seven years next to the 22.9pc that was marked as an annual average for the 2012/13 fiscal year.

In June, the last month of the just ended fiscal year, food inflation registered a considerable three-percentage-point swell to 23.1pc, while non-food inflation recorded a slight increase of 0.7 percentage points to 19.7pc.

Most cereal and vegetable prices continued to rise during the last month and are the main drivers of food inflation, according to the report.

Vegetables, especially onions, garlic and tomatoes, registered a rapid increase in their price in the last month. Bread, maize, wheat and rice showed stable situations in some regions, according to the report.

“Whole black pepper has also continued to increase following the trend of previous months,” reads the report.

The rise in inflation in the non-food components was also steadily increasing mainly due to the rise in the prices of alcohol, tobacco, khat, house rent, housing repair and maintenance, energy, firewood, charcoal, transportation and medical care.

Alemayehu Geda (Prof.), a macroeconomist and a university lecturer at Addis Abeba University, is highly skeptical of the figures from the Agency, saying that there is no way that food inflation would go down in the months between April and August.

“The crop supply during this season only covers four percent of the total annual agricultural commodities supply of the country,” he said. “Non-food inflation would also be high due to import disruptions caused by COVID-19 and the depreciation of the Birr.”

Even though the figure is accurate, the rate is still very high, according to Alemayehu.

For the newly started fiscal year, the administration plans to lower the headline inflation rate to 9.8pc. During the just ended fiscal year, the annual average inflation rate stood at 19.9pc, one of the highest marks. The government also projected the economy would grow by 8.5pc in the new fiscal year.

The administration is on the wrong path in using exaggerated and unrealistic data, according to Alemayehu.

Two weeks ago Prime Minister Abiy Ahmed (PhD) announced that the country's nominal GDP stood at 3.4 trillion Br. However, the data from the National Bank of Ethiopia shows that the nominal GDP of the country stands at 2.2 trillion Br, according to the expert.

“It’ll make them believe that the economy has capacity for them to prepare an expansionary budget,” he said.