Ethiopia’s economy set for faster growth this year

Ethiopia expects its economy to grow by more than 10% this year, following strong performance in agriculture and other key sectors, as reported by APA News on February 3rd. The government has raised its growth forecast to 10.2% for the current fiscal year. 

Speaking to the House of People’s Representatives, the lower chamber of parliament, Prime Minister Abiy Ahmed said the government now expects the economy to grow by 10.2% in the fiscal year that began on July 8, 2025. This is higher than the 9.2% growth forecast made six months ago.

Abiy noted that the revised figure follows recent assessments by the International Monetary Fund (IMF) and stronger-than-expected economic performance during the first half of the fiscal year. He told lawmakers that the updated forecast reflects significant gains seen across several sectors of the economy.

Last week, the IMF projected Ethiopia’s economic growth at 9.3% for the 2025–26 period. Abiy pointed out that the gap between the government’s estimate and the IMF’s forecast is now very small. He described this as a sign of closer alignment between national projections and international assessments. 

According to the prime minister, agriculture has been the main reason for the stronger projection. He said farmers across the country had harvested close to 1 billion quintals of agricultural produce over the past 6 months. This figure, he added, is more than 50% higher than earlier expectations.

Abiy also credited ongoing government reforms and rising investment for supporting growth. He said progress in major development projects, along with increased use of technology, including artifical intelligence (AI), has helped improve productivity.

Investment in early childhood education was also cited as an important long-term factor for economic development. Moreover, Ethiopia also signed a $250 million funding deal with the World Bank to expand urban employment opportunities. 

The PM highlighted large infrastructure projects as another pillar of growth. These include road and corridor developments and projects aimed at building a climate-resilient economy.

He said such investments are designed to support long-term growth and improve living standards. Ethiopia has also inaugurated a new wind power plant to increase its renewable energy supply. 

Looking beyond Ethiopia, Abiy said Africa’s economic growth prospects look strong. He noted that five of the world’s ten fastest-growing economies in 2025 are expected to be African countries. He said this shows the continent’s growing potential, despite global economic uncertainty.

 

APA News, Maghrebi.org