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Eighth Ethiopia Economic Update : Ensuring Resilient Recovery from COVID-19 (Inglês)

COVID-19 has severely affected Ethiopia, weakening its economic performance. Ethiopia has experienced a collapse in external demand since April 2020 due to COVID-19. While merchandise exports, excluding gold, increased by 5.8 percent overall in FY20, they declined by 4.1 percent during July-December 2020 (year-on-year). Exports of garments, textiles, and fruits and vegetables have been particularly hit since the onset of the pandemic. Both exports and imports of services, dominated by air transport, recorded negative growth in FY20. Remittances dropped by 10 percent in FY20, although they have rebounded during the first half of FY21. Merchandise imports, which were already on decline prior to COVID-19, dropped by 8 percent in FY20, contributing to the narrowing of the current account balance, estimated at about 4 percent of GDP. Meanwhile, foreign direct investment has been severely hit, with inflows declining by 20 percent in FY20, contributing to weakening reserve levels. Despite the severe impacts, Ethiopia grew at 6.1 percent in FY20, as the impact of the COVID-19 pandemic took place largely in the final quarter of the fiscal year. Phone survey data suggests that both firm revenue and household income are significantly depressed, which points to weakening domestic demand. The adverse impact of the COVID-19 pandemic on economic activity is expected to continue in FY21, prior to experiencing a rebound in FY22 and beyond. Further action is needed to ensure a resilient economic recovery. The Government of Ethiopia is to be commended for having kept advancing its Homegrown Economic Reform Agenda despite COVID-19. Implementing some complementary reforms will be key to ensuring a resilient recovery in the new COVID-19 normal.

Detalhes

  • Autor

    Sanchez Martin,Miguel Eduardo, Mulugeta,Samuel, Wieser,Christina, Getachew Kelbore,Zerihun

  • Data do documento

    2021/03/01

  • TIpo de documento

    Documento de Trabalho

  • No. do relatório

    158591

  • Nº do volume

    1

  • Total Volume(s)

    1

  • País

    Etiópia,

  • Região

    Africa East,

  • Data de divulgação

    2021/04/27

  • Disclosure Status

    Disclosed

  • Nome do documento

    Eighth Ethiopia Economic Update : Ensuring Resilient Recovery from COVID-19

  • Palavras-chave

    commercial bank; Technical and Vocational Education; small and medium enterprise; real effective exchange rate; foreign direct investment; average rate of inflation; debt service to export; international price of oil; real exchange rate; foreign exchange shortage; recent months; economic reform program; Foreign Exchange Reserve; private bank; resilient recovery; private commercial bank; access to finance; safety net program; domestic indirect tax; high growth rate; fruit and vegetable; rate of depreciation; current account deficit; tight monetary policy; current account balance; reserve money; competitive auction; Public Health Emergency; stock of debt; living standard measurement; risk of debt; import of service; private sector actors; food security situation; price of crude; lower oil price; million people; increase in prices; loss of income; human capital loss; economic reform agenda; global value chain; international oil price; debt to export; budget support operations; foreign exchange allocation; social security payment; import of goods; movement of good; income due; domestic economic activity; public sector investment; Development Policy Financing; financial sector stability; private sector lending; trade and investment; annual average growth; corporate bond issue; privileges and immunity; liquidity injection; development partner; broad money; merchandise export; economic recovery; liquidity constraint; macroeconomic development; inflation start; transport service; retail trade; deposit ratio; domestic trade; Bank Credit; forbearance measure; import item; foreign trade; high inflation; Travel Services; Real estate; revenue category; monetary sector; liquidity ratio; telecom sector; trading partner; federal level; tax deferral; liquidity shortage; fiscal deficit; policy option; capital inflow; emergency response; industrial production; minimum deposit; Protecting Livelihoods; merchandise import; insurance companies; Capital Inflows; nominal depreciation; external demand; domestic demand; social assistance

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