Ethiopia's mid-year budget deficit exceeds 90 billion Birr due to surging expenditures
via The Reporter Ethiopia6 min read
Ethiopia's federal government recorded a budget deficit of 93.6 billion Birr in the first half of the 2025/26 fiscal year, according to the Ministry of Finance. This deficit resulted from public spending growing faster than revenue, with expenditures reaching over 798 billion Birr, an 80 percent increase from the previous year. While total revenues and grants rose by 55 percent to nearly 705 billion Birr, primarily from tax revenue, recurrent spending, including civil service salary adjustments, expanded social protection programs, and inflation-related outlays, significantly drove up expenditures. Debt servicing costs, particularly interest payments on domestic debt, also increased by over 250 percent. To cover the deficit, the government relied heavily on domestic borrowing, totaling 139.7 billion Birr. Despite these financial challenges, the Ministry forecasts 10.2 percent GDP growth for 2025/26 and noted improved export performance, driven by gold, which pushed export revenue past five billion dollars. However, import values also grew by 23.3 percent, leading to a widening trade deficit from USD 5.9 billion to USD 6.3 billion.
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This summary was AI-generated from a story originally published by The Reporter Ethiopia.
Ethiopian Airlines has received the first of two Twin Otter Classic 300-G aircraft from Canadian manufacturer De Havilland Aircraft. This acquisition is part of an agreement announced during the Paris Air Show in 2025, aimed at modernizing and strengthening the airline's domestic operations and expanding its reach in the regional market. The aircraft is expected to bolster Ethiopian Airlines' operations across Ethiopia and the wider East African region, including tourism destinations and lakeside cities. Ryan DeBrusk, Vice President of Sales and Marketing at De Havilland Canada, highlighted the Twin Otter's reliability, versatility, and ability to operate in challenging environments. The Twin Otter Classic 300-G features short takeoff and landing performance, increased payload capacity, a Garmin G1000 integrated flight deck, lightweight cabin seats, upgraded electrical systems, and improved cockpit ergonomics. Mesfin Tasew, Ethiopian Airlines Group CEO, stated that the aircraft will enable better service to remote areas and support tourism, economic development, and essential air services. The second Twin Otter Classic 300-G is scheduled for delivery later in 2026.
Must ReadThe Tigray People's Liberation Front TPLF on Friday condemned new United States visa restrictions on some of its members, accusing Washington of a one-sided approach. The TPLF stated that these measures overlook the Ethiopian government's alleged failure to implement key provisions of the 2022 Pretoria peace agreement. The US announced the sanctions on June 18, following clashes between Tigrayan forces and the Ethiopian National Defense Force, warning of renewed hostilities. The TPLF, responding from Mekelle, rejected the US characterization of the crisis and blamed the federal government for not fulfilling its obligations under the Cessation of Hostilities Agreement. The party alleged that Addis Ababa continues to restrict essential services, including banking, fuel supplies, and humanitarian access, which has hindered the return of displaced people and contributed to Tigray's exclusion from Ethiopia's June 1 elections. The TPLF urged Washington to apply accountability measures equally to all parties and pressure the federal government to implement outstanding provisions of the peace agreement, including the withdrawal of non-federal forces from disputed territories and the restoration of the TPLF鈥檚 legal status. The Ethiopian government has not publicly responded to this latest TPLF statement, though it has previously affirmed its commitment to the Pretoria Agreement.
Dr. Abebe Shibru, country director for MSI Ethiopia Reproductive Choices, discussed the organization's shift from a donor-dependent model to a financially self-sustaining social enterprise. For over 35 years, MSI Ethiopia has focused on maternal and child health and reproductive health services, contributing to a significant reduction in maternal mortality rates in Ethiopia from 800-1000 per 100,000 live births to approximately 169 per 100,000. The organization serves up to two million people annually, with 85 percent of clients residing in rural areas. Faced with declining foreign donor funding, MSI Ethiopia adopted a social business model five years ago. This model involves charging fees for some services, not for profit, but to reinvest in social causes and support free services for underserved communities. While still receiving some donor support, 70 percent of its funding is now generated locally. The organization operates five hospitals, 16 medium clinics, and training centers, with revenue from these operations contributing to its self-sustainability. MSI Ethiopia also engages with religious and community leaders to challenge cultural misconceptions and advocate for policies that prioritize reproductive health, including a progressive law on safe abortion under certain preconditions. The organization emphasizes the economic benefits of family planning, linking it to women's education and overall socioeconomic development, and works to involve men in family planning dis