“Hyperinflation” in Ethiopia forces the country’s largest vehicle supplier, the Motor & Engineering Company of Ethiopia Limited S.C., to declare a net monetary loss of GBP 29.6 million (USD 36.8 million) in 2022, according to its audit report. - Advertisement -The largest vehicle supplier was forced to make an adjustment to its consolidated statement due to Ethiopia’s designation as a hyperinflationary economy throughout the course of the year as the nation’s three-year cumulative inflation rate surpassed 100 percent. Ernst & Young, one of the world’s leading accounting firms, has designated Ethiopia as hyperinflationary due to the three-year cumulative rate of inflation. Under such conditions, according to Abdulmeman Mohammed (PhD), a financial analyst with over two decades of experience, it is feasible to incur a net monetary loss. In a period of inflation, an entity holding an excess of monetary assets over monetary liabilities loses purchasing power,” said the financial analyst.

Source: Ethiopian News April 23, 2023 06:39 UTC