The skyline in Ethiopia

Ethiopia Economic Forecast

Ethiopia Economic Outlook

Conflict in the northern Amhara region has disrupted economic activity in FY 2023 (July 2023–July 2024) to date, and it has escalated in recent weeks. In mid-August, Parliament ratified a state of emergency, which will remain in place until February 2024. In the wake of this, the federal military presence in the region has increased. Instability and harsh security measures in the area are likely to hamper trade, investment and agriculture, potentially igniting a food price rally, as Amhara accounts for a third of the country’s food production. Meanwhile, also in mid-August, the Central Bank loosened restrictions on the foreign exchange market: It increased the share of foreign currency that Ethiopian exporters can keep from 20% to 40%, thus incentivizing exports and making it easier to pay for imports with foreign currency.

Ethiopia Inflation

Inflation came in at 28.2% in August, down from 28.8% in July. Inflation is set to average slightly below last calendar year’s level, but it will remain elevated amid the government’s gradual lifting of fuel subsidies. Risks, which are skewed to the upside, include an intensification of the conflict in the north and the El Niño weather phenomenon stoking food prices.

This chart displays Economic Growth (GDP, annual variation in %) for Ethiopia from 2012 to 2021.

Ethiopia Economic Data

2018 2019 2020 2021 2022
Population (million) 97.6 99.7 101.9 104.1 105.7
GDP (USD bn) 92.6 96.6 99.3 - -
GDP per capita (USD) 949 969 974 - -
GDP (ETB bn) 2,691 3,374 4,341 - -
Economic Growth (Nominal GDP, ann. var. %) 22.3 25.4 28.7 - -
Economic Growth (GDP, ann. var. %) 9.0 6.1 6.3 6.4 -
Fiscal Balance (% of GDP) -2.5 -2.8 -2.8 -4.2 -
Public Debt (% of GDP) 55.8 53.9 53.8 46.4 -
Money (ann. var. of M2 %) 22.5 20.5 23.9 23.9 33.4
Inflation (CPI, ann. var. %, eop) 10.6 19.6 18.2 35.1 33.8
Inflation (CPI, ann. var. %, aop) 13.8 15.8 20.3 26.8 33.9
Minimum Lending Rate (%, eop) 7.00 7.00 7.00 7.00 7.00
Exchange Rate (ETB per USD, eop) 28.13 32.00 38.00 49.20 53.57
Exchange Rate (ETB per USD, aop) 27.71 29.24 34.91 43.77 51.94
Current Account Balance (USD bn) -4.9 -5.2 -2.7 -4.8 -5.1
Current Account Balance (% of GDP) -5.3 -5.4 -2.7 - -
Merchandise Trade Balance (USD bn) -12.6 -11.8 -9.9 -12.0 -14.7
Merchandise Exports (USD bn) 2.7 2.7 3.3 3.9 4.0
Merchandise Imports (USD bn) 15.3 14.6 13.1 16.0 18.7
Merchandise Exports (ann. var. %) -10.6 1.5 18.8 20.5 1.1
Merchandise Imports (ann. var. %) -3.6 -4.9 -9.9 21.8 16.8
Foreign Direct Investment (USD bn) 3.3 2.5 2.4 4.3 3.7
International Reserves (USD bn) 4.0 3.0 3.0 - -
International Reserves (months of imports) 3.1 2.5 2.8 - -
External Debt (USD bn) 27.8 28.4 30.4 30.0 -
External Debt (% of GDP) 30.1 29.4 30.6 - -

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