Economy
Economists Caution Against Equating GDP Revision With Real Growth
Capital Ethiopia · 12 hours ago · Read the Full Story on Capital Ethiopia
AI SUMMARY
Economists warn that Ethiopia's 59.21 percent GDP increase following a statistical rebasing exercise reflects a methodological update rather than a sudden expansion in economic activity or living standards.
- Ethiopia's estimated gross domestic product increased by 59.21 percent following a statistical rebasing exercise.
- The revised national accounts put GDP for the 2024/25 fiscal year at 24.03 trillion birr, or US$201.42 billion, compared with the previous estimate of 15.09 trillion birr, or US$126.5 billion.
- Minister of Finance Fitsum Assefa stated that GDP reached 31.86 trillion birr, or US$210.7 billion, in 2025/26, placing Ethiopia fifth among African economies and third in sub-Saharan Africa.
- The rebasing exercise was conducted between September 2025 and September 2026 to update the framework measuring economic output.
- Tewodros Mekonnen of the International Growth Centre stated that the 59 percent increase reflects methodology changes and the inclusion of previously unrecorded activities rather than real growth.
- Under the revised estimates, services account for 35.91 percent of GDP, agriculture accounts for 31.57 percent, and industry accounts for 30.20 percent.
- Economist Abdulmenan Mohammed warned that the larger GDP estimate could lower the reported debt-to-GDP ratio and potentially encourage broader taxation, placing pressure on businesses and individuals.
- The exercise was carried out by Ethiopian professionals in accordance with the international System of National Accounts 2008, with technical support from the International Monetary Fund.
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