Ethiopia’s government expects economic growth to accelerate in fiscal year 2025, starting July 8. Finance Minister Ahmed Shide informed parliament that the predicted expansion rate of 8.9 percent is higher than the current year’s estimated 8.4 percent increase.
This positive outlook is supported by a broad reform program, which is being undertaken in collaboration with the International Monetary Fund.
Shide also stated that the national budget deficit is expected to increase marginally, hitting 2.2% of GDP. This represents a minor increase from the current year’s 2.1%. Ethiopian government expenditures are estimated to reach 1.9 trillion birr, equivalent to 14 billion US dollars at current exchange rates.
Ethiopia’s export sector generated 7.2 billion dollars in the first 11 months of the fiscal year, up over 118% from the previous year. The increase in export revenue is crucial for ongoing debt restructuring talks, especially the government’s approach to its defaulted $1 billion bond.
The IMF’s next economic review, due in the coming weeks, will analyse this outlook. Strong export performance may boost international confidence and influence creditor decisions during loan negotiations.
