Ethiopia Investment Trends Show a Mixed Picture so far in the Fiscal year: Cepheus Capital

Cepheus Capital has published the quarterly Ethiopia Macroeconomic Review for the first quarter of 2022.

The macro-outlook anticipates:

1. 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.
2. A fiscal deficit of just under 4% of GDP, as previously forecast.
3. Given global price shocks, a higher current account deficit (4% of GDP this year vs. 3% last year).
4. BOP pressures—and thus severe forex challenges for private businesses—until late 2022, with modest improvements likely thereafter; and
5. 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.

Please find the report by following the link https://cepheuscapital.com/insights/ / CLICK HERE