IMF Staff Country Reports

The Federal Democratic Republic of Ethiopia: Request of an Arrangement Under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia

July 29, 2024

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International Monetary Fund. African Dept. "The Federal Democratic Republic of Ethiopia: Request of an Arrangement Under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia", IMF Staff Country Reports 2024, 253 (2024), accessed December 21, 2024, https://doi.org/10.5089/9798400285530.002

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Summary

This paper presents The Federal Democratic Republic of Ethiopia’s Request for an Arrangement under the Extended Credit Facility. The four-year financing package will support the authorities’ Homegrown Economic Reform Agenda to address macroeconomic imbalances, restore external debt sustainability, and lay the foundations for higher, inclusive, and private sector-led growth. The economic program envisages a comprehensive policy package to stimulate private sector activity and increase economic openness to promote higher and more inclusive growth. Supportive macroeconomic policies, including the elimination of monetary financing of government deficits, monetary policy tightening, and prudent fiscal management, will need to be sustained to keep inflation in check, ensure a successful implementation of the market-determined exchange rate, and durably address exchange rate shortages. The authorities are advancing reforms to ensure the sustainability of public finances. The authorities’ ambitious and comprehensive home-grown structural reform agenda will focus on better governance and public service delivery, competitiveness, and the business climate, to stimulate private sector-led growth and contribute to poverty reduction and raising living standards.

Subject: Debt service, Debt sustainability, Exchange rates, External debt, Foreign exchange

Keywords: Africa, Current account control, Debt service, Debt sustainability, Exchange rates, Food price inflation, Global, Market participant, Monetary policy rate, Reform agenda, Sub-Saharan Africa

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