In a clash of economic forecasts, the International Monetary Fund (IMF) and the Ethiopian government find themselves at odds over the country's economic growth projections. The IMF released its October 2023 World Economic Outlook report today, titled "Navigating Global Divergences," offering insights into Ethiopia's economic landscape.
According to the report, the IMF predicts Ethiopia's economy will experience a growth rate of 6.1 percent in 2023, followed by a slight increase to 6.2 percent in 2024. These projections differ from the government's more ambitious goal of achieving a 7.9 percent economic growth during the current Ethiopian fiscal year, as announced by President Sahlework Zewde during a Joint Session of the House of Peoples Representatives (HoPR) and House of Federation (HoF) on October 9, 2023.
President Sahlework emphasized the government's commitment to implementing the ten-year prospective plan, describing it as a "historic shift" for the national economy. She expressed confidence in the government's ability to realize the plan and achieve the targeted 7.9 percent economic growth for the current fiscal year.
However, the IMF's projections paint a more cautious picture. While acknowledging Ethiopia's positive growth trajectory, the IMF's estimates fall short of the government's aspirations. The report also raises concerns regarding inflation, with the IMF projecting an inflation rate of 29.1 percent in 2023, gradually decreasing to 20.7 percent in 2024. These figures differ from the National Bank of Ethiopia's inflation targets of 20 percent for the current fiscal year and 10 percent for the following year.
