Over the last 25 years, ethiopia has made incredibly important development progress, underpinned by rapid economic growth. The major objective of gptii is to serve as a springboard towards realizing the national vision of becoming a low middleincome country by 2025, through sustaining the rapid, broadbased, and inclusive economic growth, which accelerates economic transformation and the journey. This, in turn has, helped in gaining replicable development experiences over the last decade and half. Although data showing healthy export growth points to a good start to fiscal year 2019a2020 july 2019july 2020, the outbreak of coronavirus will be taking a heavy toll on the economy. This paper measures the impact of foreign direct investment fdi on economic growth in ethiopia based on annual time series data over the period 1974 to 2011. Factors that determine the growth of micro and small enterprises. Ethiopia is now africas fastest growing economy cnn. Its overall score is unchanged, with an improvement in judicial effectiveness offset by a. In the same way, after four years, that means in 2010, the country has achieved 10. Apr 24, 2018 ethiopia a view of the capital of ethiopia, addis ababa.
Mersa 16 october 2007 in spite of actual and policyinduced obstacles, the ethiopian economy during the last three years, like that of many other developing countries,1 has shown signs of life. But a new ethiopia is emerging from troubled times and the latest international monetary fund imf forecast says ethiopia will be the fastestgrowing economy in subsaharan africa in 2018. Economic growth and development in ethiopia springerlink. Ethiopia economic outlook african development bank. Under haile selassie i reigned 193074, ethiopias economy enjoyed a modicum of free enterprise. Determinant of economic growth in case of ethiopia.
Corona virus new blow to economy growth expected to drop from 3. Productive capacity and economic growth in ethiopia. Based up on the finding it is evident that balancing economic growth target in line with a monetary policy target may have a vital role to boost economic growth and control the. Thereafter, high levels of foreign investment and the governments reform agenda will stimulate economic growth throughout 202124. Economic growth and poverty in ethiopia economic growth refers to an increase in the national income or per capita income 2. Jul 18, 2019 over the last 25 years, ethiopia has made incredibly important development progress, underpinned by rapid economic growth. The poverty headcount, measured by the national poverty line, fell from 38. In 20, the economic growth recorded in ethiopia was 9. The economic outlook is positive, and real gdp growth is projected to stabilize at 7. Selection of key themes for ethiopia developmental state via 5 year plans rapid industrialisation strategy key role of logistics infrastructure in growth building tourism around ethiopian airlines fragile state political unrest emergency rule o. However, basic challenges such as unskilled labor, high transport costs. Its main objective is that the country becomes a lowermiddleincome country by 2025.
The main development agenda of the ethiopian government is poverty eradication. This chapter presents economic growth history of ethiopia. Pdf determinant of economic growth in case of ethiopia. Factors that determine the growth of micro and small. Ethiopia has registered remarkable economic performance with annual growth averaging 10. Ethiopia macroeconomic handbook 2019 cepheus growth capital. Request pdf economic growth and development in ethiopia sustained and inclusive economic growth has gained much attention in recent years acemoglu in introduction to modern economic growth. Ethiopia macroeconomic handbook 2019 cepheus growth. Pdf determinants of food security in the oromiya region of ethiopia. The paper starts with an overview of ethiopias economic growth and the change in the domes tic economic structure.
The interaction between growth and inflation is one of the macroeconomic problems. Oct 26, 2017 ethiopias economy is concentrated in the services and agriculture sectors. Ethiopias new prime minister has promised to jumpstart serious economic reforms. Ethiopia is africas fastestgrowing economy world economic. Pdf the paper performs a qualitative narrative appraisal of the existing empirical literature on the key macroeconomic determinants of. In 2019, ethiopias real gross domestic product grew by around 8. The paper starts with an overview of economic growth and the change in the domestic economic structure. Ethiopias economy is concentrated in the services and agriculture sectors.
Economic growth, development and poverty in ethiopia. The statistic shows the growth in real gdp in ethiopia from 2009 to 2019, with projections up until 2021. In brief, we find that ethiopias rapid economic growth, concentrated in agriculture and services, was driven by substantial public infrastructure investment and supported by a conducive external environment. The report includes countryspecific threeyear forecasts for major macroeconomic indicators, including commodity and financial markets. The country has experienced fast economic growth in the last decade, averaging around 10% a year. Ethiopia s economy experienced strong, broadbased growth averaging 9. Thus, gtp ii is primarily considered to be an important milestone towards.
Ethiopia gdp annual growth rate 19812018 data 2019. Thus, gtp ii is primarily considered to be an important milestone. Ethiopia is driving economic growth through the governments laserlike focus on sectors such as manufacturing, energy and infrastructure. Economic reform incorporating private sector is expected to help the economy grow faster. Descriptive analysis of macroeconomic indicators since 1992 is also made. Growth should benefit from the homegrown economic reform program, which seeks to address macroeconomic imbalances and unlock structural. Pdf infrastructure development and economic growth in ethiopia. Ethiopias economic growth miracle defies the one size fits all. The main objective of this paper is to test that, whether inflation is an indicator or obstacle for economic growth of ethiopia. It in particular examines how fdi affects gdp growth, both directly and also conditioning on trade liberalization that ethiopia adopted in early 1990s.
Especially after world war ii, tourism, banking, insurance, and transport began to. The ethiopian economy has experienced impressive growth performance over the last decade with average gdp growth rate of 11 %, which is about double of. This growth was driven by government investment in infrastructure, as well as sustained. This page has economic forecasts for ethiopia including a longterm outlook for the next decades, plus mediumterm expectations for the next four quarters and shortterm market predictions for the next release affecting the ethiopia economy. Ethiopias reform agenda is expected to support growth that is projected to be slightly below or above 8% in the near term. Request pdf economic growth and development in ethiopia sustained and inclusive economic growth has gained much attention in recent years acemoglu in introduction to. Greater economic growth is key to reducing poverty, the report notes. Especially after world war ii, tourism, banking, insurance, and transport began to contribute more to the. The paper starts with an overview of ethiopia s economic growth and the change in the domes tic economic structure. Ethiopia gross domestic product gdp growth rate 2021.
Ethiopias economic growth performance african development bank. Effect of inflation on economic growth of ethiopia science. This economic growth was higher than the average ssa economic growth. Ethiopias real gross domestic product gdp growth decelerated to 7. This is double the sub sahara africa and triples the world average growths over this period and has led to ethiopia being rated as one of the fastest growing economies in the world. In brief, we find that ethiopias rapid economic growth, concentrated in agriculture and services, was driven by substantial public infrastructure investment and supported by a. The federal democratic republic of ethiopia and the imf. Ethiopia gdp annual growth rate 19812018 data 20192020. Our view of the ethiopian economy is inspired by keynesian and structuralist thinking in the tradition.
Attention is given to the manufacturing sector as the success of ethiopias growth and trans. As discussed in chapter three a number of factors including investment, trade, economic policy, institution and many others affect economic performance of countries. Ethiopia the human capital index hci database provides data at the country level for each of the components of the human capital index as well as for the overall index, disaggregated by gender. The manufacturing sector is seen as the success of ethiopia s growth. Imf office in the federal democratic republic of ethiopia office information. This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart. This robust growth reinforced economic reform and poverty reduction efforts aimed at achieving the mdgs by 2015. Determining the effect of inflation on the economic growth of one country must be considered as a prior issue to build up a healthy economy. Ethiopia a view of the capital of ethiopia, addis ababa. Public protests disrupted the nation in 2016 in the oromia and amhara regions, with the protesters citing concerns about political and economic marginalization. As you can see in the table 1 below in 2006 the annual economic growth of ethiopia was 11. A notable example can be found in the grand ethiopian renaissance dam gerd where ethiopia plans to leverage the blue nile to become africas largest exporter of electricity.
Informed by these experiences and having recognized future opportunities, ethiopia has accepted with strong government commitments and. Ethiopia economy gdp, inflation, cpi and interest rate. 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. In 2019, ethiopia s real gross domestic product grew by around 8. Ethiopia the second most populous country in africa is a oneparty state with a planned economy. This comparative perspective is in many ways what the imf is good at. Impact of foreign direct investment on economic growth of. Federal democratic republic of ethiopia growth and transformation. Ethiopias economy experienced strong, broadbased growth averaging 9. Economic growth and development in ethiopia request pdf.
Ethiopia economy, politics and gdp growth summary the. Accordingly one can conclude that economic growth can cause for inflation but inflation doesnt cause economic growth during the study period in ethiopia 19752016. The growth and transformation plan i gtp is a national fiveyear development plan created by the government of ethiopia to improve the countrys economic wellbeing and work towards eradicating poverty. The gross domestic product gdp in ethiopia expanded 9 percent in 2018 from the previous year. The ethiopian government has developed comprehensive agricultural and economic development plans that have contributed to the countrys substantial growth in agriculture, industry and services. The index measures the amount of human capital that a child born today can expect to attain by age 18, given the risks of poor health and poor. This plan is focused on improving the countrys infrastructure in order to establish a significant manufacturing sector. Ethiopia belongs to saa countries where poverty is widespread though the country has recently experienced appealing economic growth. Ethiopia global economic prospects examines trends for the world economy and how they affect developing countries. The assumption that there is a uniquely correct or at least a. The strong economic growth in the past decade helped to reduce poverty significantly.
The production and export of cash crops such as coffee were advanced, and importsubstituting manufactures such as textiles and footwear were established. World bank national accounts data, and oecd national accounts data files. The world bank cut its forecast for ethiopias economic growth in the 2020 fiscal year to 6. Pdf infrastructure development and economic growth in. There has also been tremendous growth in the number, diversity and market share of private businesses in the ethiopian economy. Growth and transformation plan ii united nations in ethiopia.
Ethiopia growth and transformation plan i green growth. Ethiopia aims to reach lowermiddleincome status by 2025. Ethiopias growth miracle, coupled with its large population and. Poverty defined as the number of people unable to attain the minimum living standard 3. Ethiopia s real gross domestic product gdp growth decelerated to 7. To put this progress into an international perspective. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10.