Ethiopia expects its economy to expand 8.9 % in the fiscal year beginning July 8, up from 8.4 % this year, Finance Minister Ahmed Shide told parliament on Tuesday.
Next year’s budget totals 1.9 trillion birr ($14 billion) and envisages a deficit of 2.2 % of GDP, slightly above the current 2.1 %. The government is pursuing IMF-backed reforms while negotiating a restructuring of its external debt.
Exports have become the focal point of those talks. Goods and services sales abroad reached $7.2 billion in the first 11 months of 2024/25, a 118 % jump on the previous year, helped by booming coffee and gold shipments, Ahmed said. The IMF’s January forecast had pencilled in $4.59 billion in goods exports and $7.97 billion in services for the full year; an updated assessment is due soon.
Bondholders, owed $1 billion on a defaulted 2024 issue, argue the stronger export data supports the view that Ethiopia faces a short-term liquidity squeeze rather than insolvency, bolstering their case for extending maturities instead of taking principal haircuts. Formal restructuring talks are expected within weeks.
