- Country Focus Report 2026 - Ethiopia - Mobilizing Ethiopia’s Development Financing at Scale in a Fragmented World10.91 MB
Ethiopia’s economy rebounded strongly, growing by 9.8% in FY2024/25, supported by industrial recovery, export expansion, easing inflation, and renewed external inflows.
Fiscal and external balances improved markedly, with the deficit narrowing to about 1.6% of gross domestic product (GDP) and the current account close to balance. Reforms under Home‑Grown Economic Reform 2.0, including exchange‑rate liberalisation and a transition toward interest‑rate‑based monetary policy, strengthened credibility.
Yet vulnerabilities remain acute: debt distress persists, foreign‑exchange buffers are thin, inflation remains elevated, and structural rigidities, conflict risks, climate shocks, and State-Owned Enterprise (SOE)‑related fiscal pressures continue to constrain resilience, inclusion, and private‑sector confidence.
Report by the African Development Bank
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