- Weeks after the International Monetary Fund (IMF) projected a 3.8% GDP expansion for Ethiopia in 2022, down from 6.3% in 2021, the Ethiopian authorities have claimed that the GDP of the country will expand by 6.6% this year despite the various challenges faced by the country.
Weeks after the International Monetary Fund (IMF) projected a 3.8% GDP expansion for Ethiopia in 2022, down from 6.3% in 2021, the Ethiopian authorities have claimed that the GDP of the country will expand by 6.6% this year despite the various challenges faced by the country.
The conservative outlook of the IMF was based on factors like the slowdown of the economy due to military conflict in the first half of the fiscal year, the prolonged impact of the Covid-19 pandemic as well as the effects of the Russia- Ukraine conflict. The National Macro Economic Council of Ethiopia after reviewing the nine-month performance of Ethiopia’s macro economy concluded that Ethiopia’s Gross domestic product (GDP) will grow by 6.6% this year.
However, the Council acknowledged the internal and global challenges faced by the country. The war in northern Ethiopia was a major drain of the resources. It also disrupted the business activities, displacing many and destroying properties causing severe damage to the economy.
The food prices shot up as a fallout of the Ukraine war as Ethiopia is dependent on wheat imports f Russia and Ukraine. The prices of wheat and edible oil shot up by 65% in the months of February and April alone, exacerbating the inflation in the country. The latest Central Statistical Agency report shows that the inflation rate in the country rose to a record 36.6% in April, against 34.7% in March.
The Ukraine war and the consequent rise in the global fuel prices also exerted pressure as it forced the authorities to increase fuel subsidy by 85%.As per its estimates until the end of the fiscal year, the government needs up to $1.9 billion to respond to the challenges.
The statement of the Council said that the expected GDP growth will be driven by encouraging results in the agriculture sector, particularly in crop production. The summer irrigation program is expected to increase the agricultural output to 336 million quintal this year. The service sector has picked up after the easing of the Pandemic while export trade continues to perform better.
Read also; https://trendsnafrica.com/ethiopia-announces-increase-in-oil-prices/
https://trendsnafrica.com/ethiopias-manufacturing-exports-reaches-87-of-the-target-set/
