Addis Ababa, Ethiopia 9 (10 February 2023)
The recent fiscal year in Ethiopia has seen a deceleration in economic growth, with a GDP growth rate of 6.4%. While this figure may appear modest in comparison to the previous five-year average of 9%, it is essential to acknowledge the impact of global and conflict conditions on the economy.
Despite these challenges, the services sector demonstrated resilience with a robust growth of 7.6%, reflecting expansion in government spending and a post-COVID recovery in transport, hotels, and tourism. Meanwhile, the agriculture sector also contributed to the overall growth with an expansion of 6.1%. In contrast, the industry sector struggled to keep pace, with the construction sector growing at a mere 5% and the manufacturing sector facing limitations due to foreign exchange constraints and obstacles related to ease of doing business.
The most recent six-month data also presents a mixed picture for the Ethiopian economy, with indications of strength in the services and agriculture sectors, but weakness in exports and industry. Exports have decreased by 7%, industrial park output has decreased by 26%, and cement production has decreased by 23%. Despite these setbacks, growth is still being seen in the service sector and the dominant agricultural sector.
Source: Cepheus Capital
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