• Ethiopia expects economic growth of 10.2% in the 2025/2026 fiscal year, above earlier official forecasts.

• Exports, foreign investment, agriculture, and mining support the revised outlook.

• The government links growth to reforms targeting macroeconomic imbalances and debt sustainability.

Ethiopia expects to post economic growth of 10.2% during the 2025/2026 fiscal year, which runs from July 8, 2025, to July 7, 2026. Prime Minister Abiy Ahmed announced the forecast on February 3.

The government attributes the outlook to strong performance in exports, foreign direct investment, agriculture, and mining.

“Based on an analysis of performance recorded during the first six months of the current fiscal year, we have revised our growth forecast to 10.2% by the end of the fiscal year,” Abiy Ahmed said while presenting the government’s midyear report to the House of People’s Representatives.

The revised growth rate exceeds the forecast issued by the Ministry of Finance in June 2025. The ministry previously projected growth of 8.9%.

Abiy Ahmed said the government implemented several economic reforms to support growth. These reforms include exchange-rate liberalization, full removal of foreign exchange restrictions in special economic zones, and gradual opening of the economy to private investors.

These measures helped Ethiopia generate $5.1 billion in goods exports during the first half of the fiscal year.

Addis Ababa also earned $4.5 billion from services exports over the same period. The country also attracted $2.3 billion in foreign direct investment during the first six months of the fiscal year.

The prime minister said the government designed the reforms to correct macroeconomic imbalances, ease the national debt burden, and deliver high-quality growth. He said the government aims to reorient the economy toward a more diversified structure rather than one centered on agriculture.

“At this level, Ethiopia is achieving remarkable economic success and recording one of the strongest growth rates without possessing oil resources,” Abiy Ahmed said.

Before the coronavirus pandemic, Ethiopia posted growth rates close to 10%. The economy later absorbed several consecutive shocks.

These shocks included the global health crisis, a two-year conflict in the northern Tigray region, and a series of extreme weather events such as prolonged drought and severe flooding.

Ethiopia requested a broad restructuring of its external debt under the G20 Common Framework in early 2021. The country later defaulted on its only Eurobond in December 2023.

In late March 2025, Ethiopia reached a preliminary agreement with official creditors to restructure $8.4 billion of debt.

This article was initially published in French by Walid Kéfi

Adapted in English by Ange J.A de BERRY QUENUM