Ethiopia Economic Forecast

Ethiopia Economic Outlook

January 25, 2022

Violent clashes amid the country’s ongoing domestic conflict will have weighed on the economic panorama in H1 of FY 2021 (8 July 2021–7 July 2022). With the tide of the war turning towards the government in recent weeks and as deadly drone attacks continue to ravage the Tigray region, rumors of a possible ceasefire have started to intensify. This comes amid renewed calls from third countries for an immediate cessation of hostilities and warnings from the UN World Food Programme that the Tigray region is on the brink of a humanitarian disaster, amid depleting food supplies. At the same time, the international community further hardened its stance in early January, when the U.S. excluded Ethiopia from the African Growth and Opportunity Act trade program, boding ill for the external sector. Meanwhile, surging inflationary pressures in Q2 of FY 2021 will have continued to eat into consumers’ pockets.

Ethiopia Economic Growth

The economy is set to expand this fiscal year (8 July 2021–7 July 2022), in line with easing Covid-19 restrictions and the ongoing recovery of key trading partners. However, risks are heavily skewed to the downside: The conflict threatens to derail the recovery and cause irreversible damage to the economy, while rising external debt levels further weigh on the outlook. FocusEconomics panelists see the economy growing 5.9% in FY 2021, which is up 0.3 percentage points from last month’s forecast, and 6.1% 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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