Economy of Ethiopia

Economy of Ethiopia

Addis Ababa, the financial centre of Ethiopia
Currency	Birr (ETB, ብር)
Fiscal year	7 – 8 July
Trade organisations	AU, AfCFTA, COMESA, IGAD, WTO (observer), G24
Country group	Brics Developing/Emerging[1] Low-income economy[2]
Statistics
GDP	$205.1 billion (nominal, 2024 est.)[3] $431.68 billion (PPP, 2024 est.)[3]
GDP rank	55nd (nominal, 2018) 53nd (PPP, 2018)
GDP growth	7.7% (2018) 9.0% (2019) 6.1% (2020) 6.3% (2021)[4]
GDP per capita	$1,909 (nominal, 2024 est.)[3] $4,019 (PPP, 2024 est.)[3]
GDP per capita rank	159th (nominal, 2023) 159th (PPP, 2023)
GDP by sector	Agriculture: 35.5% Industry: 23.11% Services: 36.81% (2020 est.)[5]
Inflation (CPI)	34.8% (2022 est.)[6]
Population below poverty line	20% (2019, World Bank)[7] 32.6% on less than $1.90/day (2015)[8]
Gini coefficient	35.0 medium (2015, World Bank)[9] 33.6 (2015)[10]
Human Development Index	0.498 low (2022)[11] 0.337 low IHDI (2018)[12]
Labour force	60,026,672 (2022)[13] 77% employment rate (2022)[14]
Labour force by occupation	agriculture: 72.7% industry: 7.4% services: 19.9% (2013 est.)[15]
Unemployment	4% (2022)[16]
Main industries	food processing, beverages, textiles, leather, chemicals, metals processing, cement
External
Exports	$10.45 billion (2022 est.)[17]
Export goods	coffee, qat, gold, leather products, live animals, oilseeds
Main export partners	China 16.6% United States 15.6% United Arab Emirates 8.06% Saudi Arabia 6.33% South Korea 5.13% Germany 5.09% Japan 4.21% Switzerland 3.98% Netherlands 3.98% Belgium 3.51% (2019)[18]
Imports	$23.23 billion (2022 est.)[19]
Import goods	Machinery and aircraft, metal and metal products, electrical materials, petroleum products, motor vehicles, chemicals and fertilizers
Main import partners	China 26.5% India 9.25% United Arab Emirates 8.81% France 8.8% United Kingdom 6.95% Turkey 4.4% Germany 3.95% (2019)[20]
FDI stock	$31.6 billion (2022 est.) Inflows: $2.43 billion (2021-22 est.)
Current account	−$15.2 billion (2.77% of GDP, 2022 est.)
Gross external debt	$52.21 billion (2022 est.)[21]
Public finances
Government debt	43.93% of GDP (2022 est.)[3]
Revenues	$26.18billion (2022.est)
Expenses	$26.8 billion (2022 est.)
Economic aid	$308 million (recipient) (2001[update])
Credit rating	Standard & Poor's:[22] B (Foreign currency ratings) B (Local currency ratings) B (T&C assessment), Moody's:[23] B1 (Outlook stable) Fitch:[24] B (Outlook stable)
Foreign reserves	$2.4 billion (FY 2022est.)[15]
All values, unless otherwise stated, are in US dollars.

The economy of Ethiopia is a mixed and transition economy with a large public sector. The government of Ethiopia is in the process of privatizing many of the state-owned businesses and moving toward a market economy.^[25] The banking, telecommunication and transportation sectors of the economy are dominated by government-owned companies.^[26][27]

Ethiopia has one of the fastest-growing economies in the world and is Africa's second most populous country.^[28] Many properties owned by the government during the previous regime have now been privatized or are in the process of privatization and the liberalization of its financial sector in the near future.^[29] However, certain sectors such as telecommunications, financial and insurance services, air and land transportation services, and retail, are considered as strategic sectors and are expected to remain under state control for the foreseeable future. Almost 50% of Ethiopia's population is under the age of 18. Even though education enrolment at primary and tertiary level has increased significantly, job creation has not caught up with the increased output from educational institutes. The country must create hundreds of thousands of jobs every year just to keep up with population growth.^[30]

In 2023 Ethiopia has reached an estimated GDP scale of 156.1 billion dollars nominal, for PPP the country's economy has reached an estimated 393.85 billion dollars. This mostly comes from a services-based economy with agriculture. In the latest data from 2019 Ethiopia's top trading partners globally included, China, the United States, UAE, France, the United Kingdom, South Korea, Saudi Arabia, Germany, Japan, Switzerland, the Netherlands, Belgium, Turkey, India, and Egypt.^[31][32] In 2021, agriculture made up 37.5% of the country's economic output, while services 36.25% and industry made up 21.85% of the economy.^[33] Ethiopia's economy is ranked 159th place out of 190 countries counted, in 'Ease of doing business'.^[34] Ethiopia is also a part of African Continental Free Trade Area, Common Market for Eastern and Southern Africa, Intergovernmental Authority on Development, the G24, and the World Trade organization as an observer, and is soon to join the BRICS economic alliance, with China, India, Russia, Brazil, South Africa and the new coming members: in January 2024.^[35]

While Ethiopia does not currently have a stock exchange, it did have one in the past during the reign of Emperor Haile Selassie I, called an 'ākisīyoni gebeya.' It now has a commodity exchange in Addis Ababa called the Ethiopia Commodity Exchange, which was recently established in 2008.^[36]

The Ethiopian economy has a large foreign debt, with an overall external debt of 28 billion dollars. China owns over 13 billion dollars of its debt. Its debt to GDP ratio is smaller compared to similar and neighboring countries. Ethiopia currently has 2.4 billion dollars of foreign reserves, representing a decline compared to previous years.^[37]

Ethiopia expects itself to reach a middle-income status nation within a couple years, primarily expected to be in 2025.^[38]