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Ethiopia Economy Profile 2019

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Economy - overview

Ethiopia - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, GDP grew at a rate between 8% and 11% annually – one of the fastest growing states among the 188 IMF member countries. This growth was driven by government investment in infrastructure, as well as sustained progress in the agricultural and service sectors. More than 70% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP.

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 30 years in 2015-16, creating food insecurity for millions of Ethiopians.

The state is heavily engaged in the economy. Ongoing infrastructure projects include power production and distribution, roads, rails, airports and industrial parks. Key sectors are state-owned, including telecommunications, banking and insurance, and power distribution. Under Ethiopia's constitution, the state owns all land and provides long-term leases to tenants. Title rights in urban areas, particularly Addis Ababa, are poorly regulated, and subject to corruption.

Ethiopia’s foreign exchange earnings are led by the services sector - primarily the state-run Ethiopian Airlines - followed by exports of 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 represented less than 8% of total exports in 2016, but manufacturing exports should increase in future years due to a growing international presence.

The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted roughly $8.5 billion in foreign direct investment (FDI), mostly from China, Turkey, India and the EU; US FDI is $567 million. Investment has been primarily in infrastructure, construction, agriculture/horticulture, agricultural processing, textiles, leather and leather products.

To support industrialization in sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather goods, and processed agricultural products, Ethiopia plans to increase installed power generation capacity by 8,320 MW, up from a capacity of 2,000 MW, by building three more major dams and expanding to other sources of renewable energy. In 2017, the government devalued the birr by 15% to increase exports and alleviate a chronic foreign currency shortage in the country.

GDP (purchasing power parity)
$200.6 billion (2017 est.)
$181 billion (2016 est.)
$167.6 billion (2015 est.)

note: data are in 2017 dollars

GDP (official exchange rate)
$80.87 billion (2017 est.)
GDP - real growth rate
10.9% (2017 est.)
8% (2016 est.)
10.4% (2015 est.)
GDP - per capita (PPP)
$2,200 (2017 est.)
$2,000 (2016 est.)
$1,900 (2015 est.)

note: data are in 2017 dollars

Gross national saving
32.1% of GDP (2017 est.)
32.7% of GDP (2016 est.)
32.4% of GDP (2015 est.)
GDP - composition, by end use
household consumption: 69.6% (2017 est.)
government consumption: 10% (2017 est.)
investment in fixed capital: 43.5% (2017 est.)
investment in inventories: -0.1% (2017 est.)
exports of goods and services: 8.1% (2017 est.)
imports of goods and services: -31.2% (2017 est.)
GDP - composition by sector
agriculture: 34.8% (2017 est.)
industry: 21.6% (2017 est.)
services: 43.6% (2017 est.)
Population below poverty line
29.6% (2014 est.)
Labor force
52.82 million (2017 est.)
Labor force - by occupation
agriculture: 72.7%
industry: 7.4%
services: 19.9% (2013 est.)
Unemployment rate
17.5% (2012 est.)
18% (2011 est.)
Unemployment, youth ages 15-24
total: 25.2%
male: 17.1%
female: 30.9% (2016 est.)
Household income or consumption by percentage share
lowest 10%: 4.1%
highest 10%: 25.6% (2005)
Distribution of family income - Gini index
33 (2011)
30 (2000)
Budget
revenues: 11.24 billion (2017 est.)
expenditures: 13.79 billion (2017 est.)
Taxes and other revenues
13.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-3.2% (of GDP) (2017 est.)
Public debt
54.2% of GDP (2017 est.)
53.2% of GDP (2016 est.)
Inflation rate (consumer prices)
9.9% (2017 est.)
7.3% (2016 est.)
Central bank discount rate

NA

Commercial bank prime lending rate
13.5% (31 December 2017 est.)
12.2% (31 December 2016 est.)
Stock of narrow money
$9.042 billion (31 December 2017 est.)
$8.757 billion (31 December 2016 est.)
Stock of broad money
$9.042 billion (31 December 2017 est.)
$8.757 billion (31 December 2016 est.)
Stock of domestic credit
$27.66 billion (31 December 2017 est.)
$25.78 billion (31 December 2016 est.)
Market value of publicly traded shares

NA

Agriculture - products
cereals, coffee, oilseed, cotton, sugarcane, vegetables, khat, cut flowers; hides, cattle, sheep, goats; fish
Industries
food processing, beverages, textiles, leather, garments, chemicals, metals processing, cement
Industrial production growth rate
10.5% (2017 est.)
Current Account Balance
-$6.551 billion (2017 est.)
-$6.574 billion (2016 est.)
Exports
$3.23 billion (2017 est.)
$2.814 billion (2016 est.)
Exports - commodities
coffee (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 - partners
Sudan 23.3%, Switzerland 10.2%, China 8.1%, Somalia 6.6%, Netherlands 6.2%, US 4.7%, Germany 4.7%, Saudi Arabia 4.6%, UK 4.6% (2017)
Imports
$15.59 billion (2017 est.)
$14.69 billion (2016 est.)
Imports - commodities
machinery and aircraft (14%, by value), metal and metal products, (14%), electrical materials, (13%), petroleum products (12%), motor vehicles, (10%), chemicals and fertilizers (4%)
Imports - partners
China 24.1%, Saudi Arabia 10.1%, India 6.4%, Kuwait 5.3%, France 5.2% (2017)
Reserves of foreign exchange and gold
$3.013 billion (31 December 2017 est.)
$3.022 billion (31 December 2016 est.)
Debt - external
$26.05 billion (31 December 2017 est.)
$24.82 billion (31 December 2016 est.)
Stock of direct foreign investment - at home
(31 December 2009 est.)
Exchange rates
birr (ETB) per US dollar -
25 (2017 est.)
21.732 (2016 est.)
21.732 (2015 est.)
21.55 (2014 est.)
19.8 (2013 est.)
Fiscal year
8 July - 7 July

Source: CIA World Factbook
This page was last updated on December 7, 2019

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