Ethiopia Revises Economic Growth Forecast to Double-Digit Territory
Addis Ababa, 3 February 2026
Prime Minister Abiy Ahmed has significantly raised Ethiopia’s economic growth projection to 10.2% for 2025-26, up from the finance ministry’s earlier 8.9% estimate. This upward revision represents a remarkable turnaround for the East African nation currently restructuring its external debt under an International Monetary Fund programme.
Revised Growth Projections Signal Economic Turnaround
Speaking to lawmakers on Tuesday, 3 February 2026, Prime Minister Abiy Ahmed announced the revised economic forecast, explaining that the upward adjustment reflects improved performance over the past six months of the current fiscal year [1]. The fiscal year runs from 8 July 2025 to 7 July 2026, meaning the government has assessed nearly half of the period when making this optimistic projection [1]. This represents a substantial increase of 14.607 percentage points from the finance ministry’s original June estimate, signalling growing confidence in Ethiopia’s economic trajectory despite ongoing challenges.
Economic Reforms Drive Optimistic Outlook
The enhanced growth forecast comes as Ethiopia implements comprehensive economic reforms supported by an International Monetary Fund loan programme whilst simultaneously restructuring its external debt [1]. These reforms appear to be yielding tangible results across multiple sectors, with the government citing substantial improvements in infrastructure and digital connectivity as key drivers of the revised projections [6]. The prime minister emphasised that Ethiopia is building foundations for economic growth that will be sustainable throughout the 21st century, positioning the country to capitalise on what he describes as Africa’s emerging economic opportunity [3].
Sectoral Performance Demonstrates Broad-Based Recovery
The optimism reflected in the growth revision appears grounded in concrete performance metrics across key sectors. Ethiopian Airlines, a flagship state enterprise, has demonstrated remarkable expansion, transporting 10.7 million passengers in just six months compared to its previous annual capacity of 8 million passengers [6]. This aviation sector performance illustrates the broader economic momentum driving the government’s confidence. Meanwhile, Ethiopia’s telecommunications sector has experienced explosive growth, with mobile phone users increasing from 37 million to 97 million, whilst 58 million citizens now utilise mobile money services, dramatically expanding financial inclusion [6]. The rollout of 5G internet services to 30 cities further demonstrates the infrastructure investments underpinning the economic growth projections [6].
Implications for Regional Stability and Refugee Communities
The projected 10.2% economic growth carries significant implications for regional stability and could influence decisions regarding voluntary repatriation among Ethiopian refugees currently residing in camps such as Kakuma and Kalobeyei [GPT]. Improved economic conditions typically create employment opportunities and enhance living standards, potentially making return more attractive to displaced populations [GPT]. However, refugees weighing repatriation decisions must balance economic opportunities against ongoing security and political considerations in their regions of origin [GPT]. The government’s focus on youth employment and digital infrastructure development, as outlined in the prime minister’s address, suggests efforts to create conditions that could support sustainable return and reintegration of displaced populations [3][6].