For FY2024-25, Ethiopia is expecting its economy to grow by 8.4%, up from 7.9% currently. “In recent years Ethiopia has faced a number of social, economic and political challenges. And a wide range of reforms have been implemented to address those challenges," Finance Minister Ahmed Shide said on Tuesday while presenting the State Budget proposal for the upcoming fiscal year.

"The government's priorities for the year were controlling inflation, solving foreign exchange shortages, reducing debt to healthier levels and fixing the country's balance of payments deficit,” he added.

Shide presented a budget of 971.2 billion birrs ($17 billion) to parliamentarians, marking a 21.1% increase from the previous fiscal year. Of this amount, 451.3 billion birrs will be allocated to current expenditures, and 283.2 billion birrs to investment expenditures.

The government aims for a budget deficit of 2.1% of GDP during the 2024/2025 fiscal year.

In recent years, Ethiopia's economy has weathered several economic shocks, including the COVID-19 pandemic, a two-year conflict in the northern Tigray region, and extreme weather events such as prolonged droughts and devastating floods.

Already grappling with high inflation and chronic foreign currency shortages, Ethiopia became the third African country to default on its debt in December, following Zambia and Ghana.