Ethiopia has received approval for a new tranche of international financial assistance following a periodic review of its long-term economic support program. The decision provides the government with additional resources at a time when managing external payments and public spending remains a key challenge.
The newly approved funds amount to 261 million US dollars and raise the total financing delivered under the current arrangement to more than 2.18 billion dollars.
Signs of Economic Stabilization
Recent assessments indicate that Ethiopia’s economy is showing clearer signs of stabilization. Output growth has remained resilient, export earnings have increased, and government revenues have improved due to stronger collection efforts. At the same time, foreign currency holdings have expanded and inflation has continued to slow.
These trends have contributed to a more favorable outlook than previously anticipated, supporting the decision to move forward with additional financial support.
Policy Reforms and Budget Discipline
The multi-year assistance program is structured to support Ethiopia’s broader reform agenda, which aims to correct structural weaknesses and encourage private-sector activity. Authorities have met core numerical targets set under the program and advanced most planned policy reforms.
However, deviations in the current fiscal budget prompted renewed commitments from the government to introduce corrective measures. Officials have pledged to limit the budget deficit and ensure that public expenditures remain consistent with agreed policy objectives.
Debt Talks and Ongoing Priorities
Beyond short-term financing, attention remains focused on long-term debt sustainability. Progress has been made in discussions with official creditors under a global coordination framework, while negotiations with private lenders are still in progress.
International financial officials have emphasized the importance of maintaining firm monetary policy, continuing foreign exchange reforms, and accelerating tax and customs changes. Sustaining reform momentum, they note, will be critical for supporting future growth and reducing economic vulnerability over the medium term.
