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Ethiopia Economy Profile 2016

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Economy - overviewEthiopia has grown at a rate between 8% and 11% annually for more than a decade and the country is the fifth-fastest growing economy among the 188 IMF member countries. This growth has been driven by sustained progress in the agricultural and service sectors. Ethiopia has the lowest level of income-inequality in Africa and one of the lowest in the world, with a Gini coefficient comparable to that of the Scandinavian countries. Yet despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world, due both to rapid population growth and a low starting base. Changes in rainfall associated with world-wide weather patterns resulted in the worst drought in thirty years in 2015/2016, creating food insecurity for millions of Ethiopians.

Almost 80% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP. Under Ethiopia's constitution, the state owns all land and provides long-term leases to tenants. Since 2005, the Ethiopian government has introduced a system to register traditional land use rights and provide certificates documenting these rights. Initial surveys show that land-use certificates have significantly increased the willingness of farmers to invest in improvements on their land, from terracing to irrigation. However, title rights in urban areas, particularly Addis Ababa, are poorly regulated, and subject to corruption.

Ethiopia’s export earnings are led by the services sector - primarily Ethiopian airlines - followed by several commodities. While coffee remains the largest foreign exchange earner, Ethiopia is diversifying exports and commodities such as gold, sesame, khat, livestock and horticulture products are becoming increasingly important. Manufacturing represents less than 8% of total exports. The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture, and light manufacturing.

Ethiopia remains a one-party state with a planned economy. In the fall of 2015, the government finalized and published the current 2016-2020 five year plan, known as the Growth and Transformation Plan (GTP II). GTP II emphasizes developing manufactures in sectors where Ethiopia has a comparative advantage in exporting, including textiles and garments, leather goods, and processed agricultural products. New infrastructure projects are to include power production and distribution, roads, rails, airports and industrial parks. To support industrialization, Ethiopia plans to increase power generation by 8,320 MW, up from an installed capacity of 2,000 MW, by building three more major dams and expanding to other sources of renewable energy. Construction is underway on an electric railway network that will connect Ethiopia to all its neighbors, with a link to the Port of Djibouti already finished and partially functioning. A tripling of capacity at the international airport in Addis Ababa to 25 million passengers will be completed in 2017, while construction of a completely new airport is being planned by 2025. Meanwhile, the domestic airport network has expanded to nineteen airports in a country where mountains and deserts make developing and maintaining a road network challenging. Despite difficult topography, more than a hundred thousand kilometers of roads have been built, connecting previously isolated regions.
GDP (purchasing power parity)$161.6 billion (2015 est.)
$146.7 billion (2014 est.)
$133 billion (2013 est.)
note: data are in 2015 US dollars
GDP (official exchange rate)$61.63 billion (2015 est.)
GDP - real growth rate10.2% (2015 est.)
10.3% (2014 est.)
9.9% (2013 est.)
GDP - per capita (PPP)$1,800 (2015 est.)
$1,700 (2014 est.)
$1,500 (2013 est.)
note: data are in 2015 US dollars
Gross national saving27% of GDP (2015 est.)
26.7% of GDP (2014 est.)
28.1% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 68.6%
government consumption: 8.3%
investment in fixed capital: 39%
investment in inventories: 0%
exports of goods and services: 10.3%
imports of goods and services: -26.2% (2015 est.)
GDP - composition by sectoragriculture: 41.4%
industry: 15.6%
services: 43% (2015 est.)
Population below poverty line29.6% (2014 est.)
Labor force49.27 million (2015 est.)
Labor force - by occupationagriculture: 85%
industry: 5%
services: 10% (2009 est.)
Unemployment rate17.5% (2012 est.)
18% (2011 est.)
Unemployment, youth ages 15-24total: 7.3%
male: 5%
female: 9.6% (2013 est.)
Household income or consumption by percentage sharelowest 10%: 4.1%
highest 10%: 25.6% (2005)
Distribution of family income - Gini index33 (2011)
30 (2000)
Budgetrevenues: $9.114 billion
expenditures: $11 billion (2015 est.)
Taxes and other revenues15.8% of GDP (2015 est.)
Budget surplus (+) or deficit (-)-3.3% of GDP (2015 est.)
Public debt45.8% of GDP (2015 est.)
47.5% of GDP (2014 est.)
note: official data cover central government debt, including debt instruments issued (or owned) by government entities other than the treasury and treasury debt owned by foreign entities; the data exclude debt issued by subnational entities, as well as intragovernmental debt; debt instruments for the social funds are not sold at public auctions
Inflation rate (consumer prices)10.1% (2015 est.)
7.4% (2014 est.)
Central bank discount rateNA%
Commercial bank prime lending rate11.5% (31 December 2015 est.)
11% (31 December 2014 est.)
Stock of narrow money$11.53 billion (31 December 2015 est.)
$9.981 billion (31 December 2014 est.)
Stock of broad money$23.77 billion (31 December 2015 est.)
$20.75 billion (31 December 2014 est.)
Stock of domestic credit$27.75 billion (31 December 2015 est.)
$22.58 billion (31 December 2014 est.)
Market value of publicly traded shares$NA
Agriculture - productscereals, coffee, oilseed, cotton, sugarcane, vegetables, khat, cut flowers; hides, cattle, sheep, goats; fish
Industriesfood processing, beverages, textiles, leather, garments, chemicals, metals processing, cement
Industrial production growth rate8.5% (2015 est.)
Current Account Balance-$7.893 billion (2015 est.)
-$4.407 billion (2014 est.)
Exports$3.761 billion (2015 est.)
$3.721 billion (2014 est.)
Exports - commoditiescoffee (27%, by value), oilseeds (17%), edible vegetables including khat (17%), gold (13%), flowers (7%), live animals (7%), raw leather products (3%), meat products (3%)
Exports - partnersSwitzerland 14.3%, China 11.7%, US 9.5%, Netherlands 8.8%, Saudi Arabia 5.9%, Germany 5.7% (2015)
Imports$10.69 billion (2015 est.)
$11.57 billion (2014 est.)
Imports - commoditiesmachinery and aircraft (14%, by value), metal and metal products, (14%), electrical materials, (13%), petroleum products (12%), motor vehicles, (10%), chemicals and fertilizers (4%)
Imports - partnersChina 20.4%, US 9.2%, Saudi Arabia 6.5%, India 4.5% (2015)
Reserves of foreign exchange and gold$3.589 billion (31 December 2015 est.)
$3.483 billion (31 December 2014 est.)
Debt - external$15.55 billion (31 December 2014 est.)
$12.56 billion (31 December 2013 est.)
Exchange ratesbirr (ETB) per US dollar -
21.55 (2015 est.)
19.8 (2014 est.)
19.8 (2013 est.)
17.71 (2012 est.)
16.899 (2011 est.)
Fiscal year8 July - 7 July

Source: CIA World Factbook
This page was last updated on October 8, 2016

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