The Federal Democratic Republic of Ethiopia: 2025 Article IV Consultation, Third Review Under the Extended Credit Facility Arrangement, and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia

International Monetary Fund

No 2025/188, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper discusses Ethiopia’s 2025 Article IV Consultation, Third Review under the Extended Credit Facility Arrangement, and Financing Assurances Review. Article IV discussions took stock of progress on key pillars of the Homegrown Economic Reform agenda. Program discussions focused on continuing with foreign exchange reforms; developing the new monetary policy framework and maintaining appropriate monetary and financial conditions; revenue mobilization to rebuild fiscal space; strengthening financial regulation; and state-owned enterprises reform efforts. The performance continues to be strong, in line with commitments, and all quantitative performance criteria and most indicative targets were met. Of the structural benchmarks targeted for end-March and end-April 2025, one was met, and the other implemented with delay. Tight macroeconomic policies are expected to constrain economic activity in the near term, albeit less than previously anticipated based on recent indicators. Reforms are expected to support higher growth and further falls in inflation over the medium term. Key downside risks include security risks, social unrest or policy slippage.

Keywords: staff appraisal; on-balance sheet NOP; bank-client foreign exchange transaction; tax clearance certificate requirement; NBE proclamation; Currency markets; Credit; Global; Southern Africa; Sub-Saharan Africa; Africa (search for similar items in EconPapers)
Pages: 169
Date: 2025-07-15
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