Ethiopia’s economy is forecast to expand by 10.2 percent in the current 2025/26 Ethiopian fiscal year, which commenced on 8 July 2025, according to an official statement released by the Office of the Prime Minister following the 100-day macroeconomic performance review by the Council of Ministers.
This ambitious projection follows a robust 9.2 percent GDP growth recorded in the previous fiscal year, driven by consistent gains across agriculture, industry, and services—three key pillars of the country’s mixed economy. The figures place Ethiopia among the fastest-growing economies on the continent, despite ongoing regional and global economic uncertainties.
The statement attributes the continued momentum to an array of structural reforms undertaken by the government, increased domestic and foreign investment, and substantial progress on nationally significant infrastructure and manufacturing projects. These reforms form part of a broader economic liberalisation agenda designed to transition Ethiopia from a largely state-controlled model to a more market-oriented system, while still ensuring the state plays a pivotal coordinating role.
Agricultural productivity, historically the backbone of the Ethiopian economy, is projected to grow by 7.8 percent in the current fiscal year. Gains are expected to be supported by enhanced input supply mechanisms and improvements in extension services, which have collectively bolstered smallholder production and reduced vulnerability to climatic variability.
Meanwhile, the industrial sector—particularly manufacturing and agro-processing—is anticipated to expand by 13.2 percent, catalysed by the integration of value chains and increased capacity utilisation across newly established industrial parks. These efforts form part of Ethiopia’s broader industrialisation agenda that seeks to reposition the nation within the global manufacturing map, with a distinct emphasis on inclusive growth and regional trade integration.
Of particular note, Ethiopia’s commodity exports totalled USD 2.5 billion in the first quarter of the fiscal year, outperforming both prior year benchmarks and current targets. This performance is seen as indicative of improving trade logistics, enhanced agricultural output, and a stabilisation of certain key export sectors including coffee, oilseeds, and gold.
While the figures suggest a positive trajectory, economic analysts caution that challenges remain. Inflationary pressures, foreign exchange shortages, and the need for comprehensive debt restructuring continue to weigh on macroeconomic stability. Moreover, Ethiopia’s ambitious growth outlook must be viewed within the context of broader continental dynamics, including the implications of regional conflict, climate variability, and shifting trade alliances.
Nevertheless, Ethiopia’s development path demonstrates a notable assertion of policy sovereignty and long-term vision. Its economic narrative is increasingly being framed not through comparative Western benchmarks, but through a continental lens that values human development, structural resilience, and pan-African cooperation.
In a global economic environment marked by volatility and retrenchment, Ethiopia’s forward-looking stance on reform, production, and inclusive development offers a compelling case study for other African economies navigating similar transitions. Whether this projection is fully realised will depend not only on domestic implementation capacity but also on the evolving geopolitical and climatic landscape across the Horn of Africa.
The Council’s macroeconomic review reaffirms the government’s commitment to evidence-based policymaking, and reflects Ethiopia’s broader ambition to reassert its historical role as a regional anchor and developmental state—one grounded in contextually rooted African solutions.
