Ethiopian economy forecast to grow 8.5 percent in 2017/18

The International Monetary Fund (IMF) has forecast that Ethiopia’s growth is expected to stay high in 2017/18, at 8.5 percent, supported by continued recovery from droughts and export expansion.

IMF’s Executive Board has on late Wednesday announced in a statement that it has concluded the 2017 Article IV consultation with the East African country.

According to IMF, the expected economic growth will be supported by continued recovery from droughts and export expansion as new manufacturing facilities and infrastructure come online, offsetting the potentially dampening impact of restrictive macroeconomic policies.

The Ethiopian authorities’ policies envisaged under the second five-year Growth and Transformation Plan (GTP II) is also said to strengthen domestic private sector development and FDI, it was noted.

The GTP II also envisages allocating significant resources to poverty alleviation and the social safety net, while efforts to strengthen financial inclusion are underway.

According to the IMF, Ethiopia, which has recorded annual average GDP growth of about 10 percent in the last decade driven by public investments in agriculture and infrastructure, was also able to decrease the poverty rate from 44 percent in 2000 to 23.5 percent in 2015/16.

IMF also indicated that Ethiopia’s industrial activity has expanded with continued investments in infrastructure and manufacturing. Enditem