II. Findings of the CRM 281 The findings below relate to macroeconomic policy effectiveness to stabilise and spur economic growth; effectiveness of the private sector-led growth strategy; domestic revenue mobilisation; public expenditure policy and priorities; monetary policy effectiveness; macroeconomic policy; and, industrialisation, as well as investment promotion. Macroeconomic Policy, Stabilisation and Growth 282 As noted in the CSAR, Ethiopia is currently implementing its second Poverty Reduction Strategy Paper (PRSP II): the Plan for Accelerated and Sustained Development to End Poverty (PASDEP). Over time, PRSP II has become the overall government strategy for development. PASDEP shows strong vertical coordination of sectoral strategies with the overall government strategy and is well integrated with the budget through the Macroeconomic and Fiscal Framework (MEFF) and Joint Budget and Aid Reviews (JBAR) prepared by Government and donors. 283 PASDEP’s strategic vision is one of rapid and sustained growth, primarily through scaled-up development assistance and large domestic investments targeted at eliminating the poverty traps that have hindered national development. This vision shows great elements of continuity with the first PRS (SDPRP) - the Sustainable Development and Poverty Reduction Program - in areas such as infrastructure, human development, rural development, human security, and capacity building. However, significant new elements have been introduced namely, an explicit link with an exercise on what it would cost to achieve the MDGs in Ethiopia. New elements also include a renewed focus on growth, specifically in the areas of private sector and urban development, industry, and agricultural commercialisation. These innovations reflect both new thinking on the need to rebalance the growth strategy and some developments, such as private-sector led growth in the floriculture sector, and apparent stagnation in urban poverty reduction. Economic modelling 284 The Government of Ethiopia (GoE) has formulated macroeconomic projections based on PASDEP macroeconomic framework and growth scenarios. In the fiveyear period 2005/06-2009/10, the targeted rate of real economic growth is 7.0 percent per annum. Critical factors that are identified to support this growth include: • Maintain annual consumer price inflation at a maximum of 8.0 percent; • Ensure growth in domestic revenue of about 20 percent per annum, and tax revenue growth of about 22 percent per annum; and, - 125 -