Ethiopia Approves Ambitious Budget Amid Economic Reforms

Ethiopia's cabinet has given the green light to a nearly 2 trillion birr budget for the 2025/26 fiscal year, an increase of 31% compared to the previous year, according to an announcement from the Prime Minister's office. This move comes as part of the East African nation's ongoing economic reforms, which include the floatation of its birr currency and efforts to restructure national debt in collaboration with the International Monetary Fund (IMF).

Recently, Ethiopia and the IMF reached a staff-level agreement on the third review of a $3.4 billion loan program. The new budget is set to bolster national security, elevate production and productivity, and provide assistance to people impacted by disasters. This substantial budget now awaits approval by the parliament.

In June last year, the government had allocated 971.2 billion birr for the 2024/25 period, with an additional 581.98 billion birr set in November to subsidize essential commodities like fertilizer, oil, fuel, and medicine. At the current exchange rate, $1 is equivalent to 133.8803 birr.

(With inputs from agencies.)