The International Monetary Fund (IMF) estimates that Ethiopia’s real GDP will expand by 7.2 percent in 2025 and 7.1 percent in 2026.
In its economic Outlook released Tuesday, IMF said Ethiopia’s economy is projected to remain one of the fastest-growing in Sub-Saharan Africa over the next two years.
Though the estimate is below the government’s nine percent growth target for the 2025/26 fiscal year, it places Ethiopia well above the Sub-Saharan Africa average of 4.1 percent and the 3.2 percent global projection for 2025.
The IMF’s latest global outlook notes that the world economy is adjusting to a landscape reshaped by new policy measures, including tariff realignments and fiscal tightening. While some extremes of trade disruption were softened by new deals, the overall environment remains volatile. Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026, with inflation declining unevenly across regions.
For Sub-Saharan Africa, IMF projects growth to edge up from 4.1 percent in 2024 to 4.4 percent in 2026, driven by low-income economies such as Ethiopia, Tanzania, and Uganda. South Africa’s economy is expected to expand by just 1.1 percent next year, while Nigeria—the continent’s largest economy—will grow by 3.9 percent.
The IMF cautioned that risks to the outlook remain tilted to the downside, citing fiscal vulnerabilities, labor supply constraints, and potential financial market corrections. It urged policymakers to rebuild fiscal buffers, maintain central bank independence, and advance structural reforms to sustain growth and stability.
For Ethiopia, experts say maintaining high growth will depend on continued reform momentum, prudent fiscal management, and improved access to external financing. Inflation eased to 13.9 percent in 2024/25 from 19.9 percent a year earlier, but achieving the government’s single-digit target remains critical to preserving real incomes and investor confidence.
MG/as/APA