In 2008 and 2011, Ethiopia's growth performance and considerable development gains were challenged by high inflation and a difficult balance of payments situation. Inflation surged to 40% in August 2011 because of loose monetary policy, large civil service wage increase in early 2011, and high food prices. For 2011/12, end-year inflation was projected to be about 22%, and single digit inflation is projected in 2012/13 with the implementation of tight monetary and fiscal policies.