Despite ongoing economic turbulence, East Africa Macroeconomic Outlook, Volume IV by Deloitte, paints a cautiously optimistic picture for the region. At a closer look at Ethiopia, although inflation remains a significant concern, projected at 30.8% in 2023, the report highlights promising signs of progress.
The overall economy is expected to expand by 6.0% this year, followed by further growth of 6.2% in 2024. The report also sheds light on the top sectors with the highest growth projections: Tourism, Finance, and Energy sectors.
Inflation, fueled by money supply expansion and global pressures, soared from 26.8% in 2021 to 33.9% in 2022. However, recent policy measures and positive trends offer hope for a slowdown.
The National Bank of Ethiopia’s credit expansion limit to 14% and decreasing food and non-food prices are expected to bring the average inflation rate for 2023 down to 30.8%. Further deceleration is anticipated through 2024, though double-digit figures are likely to persist.
Currency depreciation, El Nino-related weather shocks, and internal conflicts remain risks to this optimistic outlook.
Source: Deloitte
