Ethiopia economy to expand 10.2% in 2025-26, prime minister says - Reuters

Ethiopia's Prime Minister Abiy Ahmed has announced ambitious economic projections for the 2025-26 fiscal year, forecasting real GDP growth of 10.2 percent. This declaration arrives at a critical juncture for Africa's second-most populous nation, which has navigated profound political and economic turbulence over the past five years. For European investors evaluating exposure to East African markets, understanding the credibility and implications of these targets is essential. The projected growth rate represents a significant recovery trajectory for an economy battered by civil conflict that lasted from 2020 to 2022, followed by subsequent currency devaluation, inflation pressures, and infrastructure damage. If achieved, a 10.2 percent expansion would position Ethiopia among the continent's faster-growing economies and substantially exceed the International Monetary Fund's most recent estimates for sub-Saharan Africa. This optimism reflects the government's confidence in ongoing stabilization efforts and infrastructure investments that have accelerated since the 2022 peace agreement. The foundation for this growth narrative rests on several key pillars. First, the government has pursued orthodox macroeconomic reforms, including a controlled currency float that, while painful in the short term, aims to attract foreign direct investment and improve export competitiveness. Second, ongoing privatization initiatives in telecommunications, airlines, and logistics present tangible entry points