Ethiopia Approves 25% Budget Increase Amid Economic Struggles

Ethiopia's cabinet approved a 25% budget increase for 2024/2025, around one trillion birr ($17.51 billion). Despite its rapid growth, Ethiopia faces economic shocks, including COVID-19, war, and extreme weather. The 2024/2025 budget, set from July 8 to July 7, awaits parliamentary approval.

Ethiopia's cabinet on Friday approved a roughly 25% increase in its 2024/2025 budget, worth around one trillion birr ($17.51 billion), the Prime Minister's office said. Despite being one of the fastest-growing economies in the region, Ethiopia is emerging from several economic shocks including the COVID-19 pandemic, a devastating two-year war in the northern Tigray region, and extreme weather events.

Already struggling with high inflation and chronic foreign currency shortages, in December it became the third African state in as many years to default on its debt. The budget for the 2024/2025 fiscal year, which runs from July 8 to July 7, would next be presented to parliament, the Prime Minister's office said in a statement.

External debt in the country of some 126 million people stood at around $28.2 billion at the end of March, according to government data. Analysts say Ethiopia may have to devalue its currency if it is to secure a rescue loan from the International Monetary Fund. ($1 = 57.1246 birr)

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