Ethiopia's nominal GDP drops by $50 billion after currency float, EU Chamber report reveals
A new report from the European Union Delegation to Ethiopia indicates a significant $50 billion drop in Ethiopia's nominal Gross Domestic Product following its July 2024 currency float. The report, titled "Ethiopia Economic and Trade Update February to June 2026," highlights that while real economic expansion occurred, nominal figures from the International Monetary Fund show a contraction from nearly $160 billion in 2023 to $109.1 billion in 2025. This is attributed to the Ethiopian Birr's depreciation against the US dollar. Kenya's economy has temporarily surpassed Ethiopia's in nominal terms, reaching $136.5 billion, a lead the IMF expects Kenya to maintain until 2028. Inflation in Ethiopia has risen, with headline inflation reaching 11.7 percent in April 2026, primarily driven by food costs, making the National Bank of Ethiopia's 10 percent target for the fiscal year ending July 2026 unlikely. The Birr, after a period of instability, showed rare stability in the second quarter of 2026 against the Euro and US dollar. Fuel procurement has shifted to spot-market purchases due to rising global prices, leading to increased costs for consumers. Exports expanded by 17 percent in 2025 to over $5.2 billion, though still below the $10 billion annual target. The government has used IMF-backed programs and central bank foreign exchange injections to protect essential imports, but mounting debt servicing costs, consuming 43 percent of recurrent expenditure, are impacting capital inves
