The Economy Environment in Ethiopia
Ethiopia’s economic freedom score is 49.6, a 2.1 decrease from 2021 making its economy the 150th freest in the 2022 global Index and 35th among the 47 African countries (2022)
- Inflation rate is very high. The most recent annual inflation rate reported (August 2022) is 32.54%, 30.42% as the previous rate.
- The Gini index coefficient is 35% (2015), ranked 106 globally.
- As of 2021,GDP is $111.27B (6th in Africa) with a growth rate of 5.64%(14th in Africa) . In 2021, the Real GDP (PPP) was $306.45B.
- GDP per Capita is $943.97 (34th in Africa) with an annual per capita growth of 3% (2021) as well as GDP per Capita, PPP was $2,366.42 making it the 33rd highest in Africa and below Africa’s average of $5774.58.
Export and Import
- Major Export commodities in 2019 are coffee, sesame seeds, gold, cut flowers, and zinc diamonds.
- Major Import Commodities in 2019 are aircraft, gas turbines, packaged medicines, electric filament, and cars.
- Ethiopia has a high rating Cost of Starting a Business in Africa. That is, 45.4% of income per capita, 12th in Africa and 19th out of 186 globally (2020).
- Food processing, beverages, textiles, leather, garments, chemicals, metals processing, and cement are industrial commodities. The industrial production growth rate as at 2017 was 10.5%, the 13th highest globally
Credit rating of Ethiopia
- Fitch rating for the year 2019 is – B
- Credit rating for Ethiopia is Moody’s rating: Caa2 (2021).
- S&P rating for the year 2021 is – CCC+.
- Interest rate as of September 2022 is 7%, the same as the previous rate.
- The Corporate tax rate as of December 2021 is 30%, as well as the Personal Income Tax rate, was also 35%.
Ethiopia has a Cost of Living Index of 51.03 points, making it the 34th highest in Africa (continent's average point of 59.81) and 138th highest globally (2017).
Negative impacts on Economy
- Investment Freedom Index for Ethiopia is 30 points, below Africa’s average of 51 points sitting 47th, the 5th lowest in Africa, and 156th globally (2022).
- Business Freedom Index for Ethiopia is 43 points, below Africa’s average of 46 points sitting 31st in Africa and 147th globally (2022).
- The value of the local currency is worsening and there has been a 13.84% appreciation of the USD over the past one year. The most recently reported (September 2022) exchange rate is Birr 52.5396 per US$1.
- The most recently reported unemployment rate as of 2021 is 3.69% making it the 10th lowest in Africa.
- Ethiopia has the 33rd Africa’s highest female unemployment rate of 4.7% (2021) and the 44th Africa’s highest male unemployment rate of 2.82%. With a 78.46% labor force participation rate (ranked 5th in Africa and 10th globally).
