ADDIS ABEBA – The International Monetary Fund forecast (IMF) said on Tuesday Ethiopia’s economy will grow at 6.2% in the 2019/20 Ethiopian fiscal year.
The growth rate is well below the National Bank of Ethiopia forecast that says gross domestic product growth would accelerate to 10.8% for the fiscal year ending in July.
Ethiopia is currently implementing a Homegrown Economic Reform Plan, consisting of a mix of macroeconomic, structural and sectoral policies, to address vulnerabilities and tackle structural bottlenecks inhibiting private sector activity.
“The macroeconomic policy measures envisaged under the Plan to address external imbalances, debt vulnerabilities, and inflation are expected to contribute to a slower growth in real GDP of 6.2 percent in 2019/20,” it said.
On December 20, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Ethiopia.
The bank observes inflation remained “elevated in double digits, largely due to higher food prices, though non-food inflation has also been trending upward”.
Public expenditure restraint and tighter monetary policy are expected to contribute to a gradual reduction in inflation, it said.
Reserves are expected to improve to around $4 billion by July, when the 2020 fiscal year ends, sufficient to cover two months of prospective imports due to higher external financing flows, the bank said.