Ethiopia Economic Forecast

Ethiopia Economic Outlook

October 19, 2021

A high Covid-19 case count and escalating domestic instability suggest that the economy remains in the doldrums in Q2 FY 2021 (8 July 2021–7 July 2022). Covid-19 restrictions have been left largely unchanged at the outset of the quarter, likely subduing activity. Meanwhile, in early October, the government launched a major offensive against Tigray rebels and expelled UN officials on allegations of supporting Tigray forces, triggering a backlash from the international community and raising the risk of further sanctions, particularly from the U.S. In politics, Abiy Ahmed was sworn in as prime minister for a second five-year term on 4 October, after the delayed vote took place in three regions—Ahmed had already won 410 out of 436 parliamentary seats in the June elections.

Ethiopia Economic Growth

GDP is expected to grow at a quicker pace this fiscal year (8 July 2021–7 July 2022) as the reopening of economies releases pent-up demand and supports the external sector. However, risks are heavily skewed to the downside: Rising public debt levels, protracted instability and high susceptibility to Covid-19 flare-ups due to a low vaccination rate all cloud the outlook. FocusEconomics panelists see the economy growing 6.5% in FY 2021, which is down 0.1 percentage points from last month’s forecast, and 6.4% 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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