Ethiopia Economic Forecast

Ethiopia Economic Outlook

August 24, 2021

Economic conditions likely remain dire in Q1 FY 2021 (8 July 2021–7 July 2022), amid persisting internal conflict. Violent clashes have reignited in the Amhara region, despite a ceasefire agreed between the government and the Tigray People’s Liberation Front in early July. Against this backdrop, on 10 August the government called for mass enlistment to contain the offensive from the rebel forces, and imposed indefinite curfews in several of the region’s cities a few days later. Meanwhile, lingering Covid-19 restrictions, amid rising new infections since the beginning of August, are likely placing an additional burden on the conflict-stricken economy. In other news, on 11 August the Central Bank called on commercial banks to freeze any collateral-backed loans due to fears of black market activity. Liquidity disruptions are bound to weigh on private sector activity and household spending.

Ethiopia Economic Growth

GDP is expected to grow at a somewhat faster pace this fiscal year (8 July 2021–7 July 2022) as the gradual reopening of economies at home and abroad bolsters domestic and external demand. However, risks are skewed to the downside amid the country’s ongoing armed conflict, its notably low vaccination rate and high levels of external debt. FocusEconomics panelists see the economy growing 6.6% in FY 2021, which is up 0.1 percentage points from last month’s forecast, and 6.6% again in FY 2022.

Ethiopia Economy Data

2015 2016 2017 2018 2019
Population (million)89.891.292.794.195.6
GDP per capita (USD)8288979101,021-  
GDP (USD bn)74.381.884.496.1-  
Economic Growth (GDP, annual variation in %)8.010.17.79.0-  
Fiscal Balance (% of GDP)-2.3-3.2-3.0-2.5-  
Public Debt (% of GDP)55.857.761.157.6-  
Money (annual variation in %)21.725.129.822.512.4
Inflation Rate (CPI, annual variation in %, eop)10.06.716.510.619.5
Inflation Rate (CPI, annual variation in %)10.17.310.913.815.8
Exchange Rate (vs USD)21.2622.4027.5828.2032.00
Exchange Rate (vs USD, aop)20.7621.9024.0727.6329.28
Current Account (% of GDP)-10.8-8.2-7.0-5.3-  
Current Account Balance (USD bn)-8.0-6.7-5.9-5.1-  
Trade Balance (USD billion)-13.8-13.6-12.9-12.6-  
Exports (USD billion)2.92.83.02.7-  
Imports (USD billion)16.716.415.915.3-  
Exports (annual variation in %)-13.4-3.67.6-10.7-  
Imports (annual variation in %)8.8-1.8-3.2-3.6-  
International Reserves (USD)3.83.03.04.0-  
External Debt (% of GDP)28.329.131.629.2-  

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Ethiopia Facts

Value Change Date
Exchange Rate31.980.01 %Jan 01
Stock Market0.40.0 %Jan 07

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