Ethiopia Economic Forecast

Ethiopia Economic Outlook

August 20, 2019

Growth is expected to have remained cool in FY 2018 and at the start of FY 2019, constrained by a wide current account deficit, drought and security concerns. Recent data revealed that the trade deficit widened in Q3 FY 2018, as exports dropped in the period, while imports rose mildly amid a higher fuel bill. In addition, low water levels led to electricity rationing from May to July, disrupting economic activity. That said, the government’s progress on economic reforms is shoring up the longer-term outlook. On 31 July, the government passed a bill opening up the financial sector to allow citizens who have acquired other nationalities to be able to invest in banks and lend money more easily. In addition, in August, the government granted a foreign company a financial-sector business license for the first time.

Ethiopia Economic Growth

Buoyant infrastructure spending and the government’s ambitious reform drive should ensure growth remains among the fastest in the region in FY 2019. However, security concerns, drought and the sustainability of government spending remain causes for concern. FocusEconomics panelists see the economy growing 7.8% in FY 2019, which is unchanged from last month’s forecast, and 7.4% in FY 2020.

Ethiopia Economy Data

Population (million)87.088.389.891.292.7
GDP per capita (USD)640731807884910
GDP (USD bn)55.664.672.480.684.4
Economic Growth (GDP, annual variation in %)10.310.
Fiscal Balance (% of GDP)-2.6-2.4-1.9-3.3-3.0
Public Debt (% of GDP)47.954.556.159.061.1
Money (annual variation in %)22.329.121.725.129.8
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)8.17.410.17.310.9
Exchange Rate (vs USD)19.0520.3321.2622.4027.58
Exchange Rate (vs USD, aop)18.7219.7220.7621.9024.07
Current Account (% of GDP)-6.1-11.0-11.1-8.3-7.0
Current Account Balance (USD bn)-3.4-7.1-8.0-6.7-5.9
Trade Balance (USD billion)-9.1-12.0-13.8-13.6-12.9
Exports (USD billion)
Imports (USD billion)12.115.416.716.415.9
Exports (annual variation in %)-7.613.1-13.4-3.67.6
Imports (annual variation in %)2.627.28.8-1.8-3.2
International Reserves (USD)
External Debt (% of GDP)22.626.229.029.531.5

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Ethiopia Facts

Exchange Rate29.060.01 %Jul 31
Stock Market0.40.0 %Jul 31

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