IMF Forecasts Ethiopia to Grow by 7.2 Percent in 2020 - ENA English
IMF Forecasts Ethiopia to Grow by 7.2 Percent in 2020
Addis Ababa October 31 /2019 Ethiopia is expected to grow by 7.2 percent in 2020, according to the International Monetary Fund.
The International Monetary Fund Regional Economic Outlook of Sub-Saharan report released today indicated that the growth is expected to ease over the medium term to about 6.5 percent, reflecting efforts to address large external imbalance through fiscal and monetary policy tightening.
Ethiopia is among the several countries in Sub-Saharan with narrow tax bases that the report considered need to advance domestic revenue mobilization.
Nine countries of the Sub-Saharan region, including Ethiopia, accounting 16 percent of the regional GDP are also at high risk of debt distress.
According to the report, growth in Sub-Saharan Africa (SSA) is projected to rise to 3.6 percent in 2020 from 3.2 percent in 2019.
It also indicated that growth is forecast to be slower than previously envisaged for about two-thirds of the countries in the region.
IMF Division Chief African Development, Papa N’diaye said “growth is projected to remain strong in non-resource-intensive countries, averaging about 6 percent”, while growth is expected to move in slow gear in resource-intensive countries.
Some 24 countries, home to about 500 million people, will see their per capita income rise faster than the rest of the world, he added.
N’diaye pointed out that inflation is expected to ease going forward.
Elevated public debt vulnerabilities and low external buffers will continue to limit policy space in several countries while the average sub-Saharan African-wide debt burden is stabilizing.
Near-term downside risks including climate shocks, intensification of security challenges, and the potential spread of the Ebola outbreak are mentioned by the report.
According to the division chief, successful implementation of reforms, including in the context of the African Continental Free Trade Area (AfCFTA), could however pose significant upside risks over the medium term.