Cepheus Capital has published the quarterly Ethiopia Macroeconomic Review for the first quarter of 2022.
The macro-outlook anticipates:
- Inflation will remain high for the rest of 2022 and most of 2023, reaching 25% by the end of 2022 and 15% by June 2023.
- A fiscal deficit of just under 4% of GDP, as previously forecast.
- Given global price shocks, a higher current account deficit (4% of GDP this year vs. 3% last year).
- BOP pressures—and thus severe forex challenges for private businesses—until late 2022, with modest improvements likely thereafter; and
- An exchange rate crawl that follows the slower pace of recent months, taking the Birr rate to 52 per USD by June 2022 and 55 per USD by end-2022.
Four major global price shocks—fuel, food, fertilizer, and freight—will result in an additional $4 billion in forex outflows this fiscal year. Several other line items, such as service imports (up by $0.6 billion), loans (down by $0.4 billion), and grants (down by $0.4 billion), will also contribute to a worsening of the Balance of payments (BOP) flows.
To the best of our knowledge, Cepheus Capital’s periodic macroeconomic reviews and sectoral reports are the only private-sector economic releases available to the general public.
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