IMF Executive Board Completes the Fifth Review under the Extended Credit Facility Arrangement for Ethiopia
IMF News, July 1, 2026
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- IMF Executive Board Completes the Fifth Review under the Extended Credit Facility Arrangement for Ethiopia
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- Published: July 1, 2026
Review outcome and financing
- The Executive Board completed the fifth review of the 48-month Extended Credit Facility (ECF) for Ethiopia.
- The decision allows an immediate disbursement of about US$464 million (SDR 342.05 million).
- The completion of the review brings total disbursements under the arrangement to about US$2.647 billion.
- About US$200 million in additional resources were brought forward under the program to help respond to pressures resulting from the war in the Middle East, especially the significantly higher price of imported fuel.
- The ECF arrangement totals SDR 2.556 billion (850 percent of quota), or about US$3.4 billion at the time of program approval on July 29, 2024.
Program performance and reform progress
- Program performance overall was in line with program commitments.
- All quantitative performance criteria (QPCs) and most indicative targets (ITs) were met.
- The government’s contribution to the Productive Safety Nets Program was lower-than-targeted because donor contributions exceeded expected amounts; overall support to beneficiaries was above objectives (including a supplement for urban beneficiaries in response to the external shock).
- Strong exports, revenue mobilization, and reserves accumulation are cited as good results from the reforms.
- Authorities continue efforts to advance debt restructuring, with several bilateral agreements signed with official creditors and significant progress with several external commercial creditors; staff welcome the agreement-in-principle reached with Eurobond holders.
- Financing assurances received and adjustment efforts made are consistent with IMF policy requirements and program parameters.
Monetary policy, FX market, and financial sector measures
- Maintaining a tight monetary stance is viewed as appropriate to anchor inflation expectations; the NBE should stand ready to tighten further if second round inflationary pressures emerge.
- Authorities are making sustained efforts to deepen foreign exchange (FX) market functioning, including:
- partially easing certain exchange restrictions;
- developing an interbank FX market; and
- enhancing competition among banks.
- Staff recommend ongoing actions to enforce net open FX position limits, develop the interbank FX market, relax exchange restrictions, and enhance competition and fairer treatment of clients.
- A well-designed plan for the NBE to improve its gold market operations, and eventually exit the gold market, consistent with reserve accumulation objectives, is recommended.
- Continued efforts to strengthen financial sector oversight and financial safety nets are important, along with close monitoring of private credit growth.
- Further progress on central bank governance reforms—including appointing new independent members to the NBE Board and recapitalization—will support the NBE’s autonomy and capacity.
Fiscal policy and public finance recommendations
- Tax revenue growth and fiscal outcomes have remained strong.
- Prudent expenditure management and revenue administration reforms are important to ensure fiscal sustainability, revenue mobilization, and priority spending objectives can be sustained in the medium-term.
- Phasing out fuel subsidies while protecting vulnerable groups is recommended to create space for economic development and social spending objectives.
- Further progress on fiscal transparency, fiscal risk monitoring, and oversight of state-owned enterprises remains important.
- Prudence in contracting new debt and development of a liquid local currency market are important to limit debt vulnerabilities.
Debt restructuring and financing assurances
- Authorities continue efforts to advance debt restructuring; several bilateral agreements with official creditors have been signed.
- Significant progress has been made with several external commercial creditors, and an agreement-in-principle with Eurobond holders is welcomed.
- Completing the debt restructuring process through good faith engagement with creditors will help restore debt sustainability and meet financing needs.
Key quoted guidance from Mr. Nigel Clarke, Deputy Managing Director and Chairman of the Board
- Continue reform efforts to sustain macroeconomic momentum amid the external shock from the war in the Middle East.
- Enhance FX market functioning for efficient price discovery and enforce net open FX position limits.
- Maintain a tight monetary stance and be prepared to tighten further if needed.
- Modernize the monetary policy framework and foster a competitive, market-oriented financial sector.
- Prioritize prudent fiscal management, sustained revenue mobilization, phasing out fuel subsidies with protection for the vulnerable, and stronger fiscal transparency.
- Complete debt restructuring, exercise prudence in new borrowing, and develop the local currency market.
- Strengthen financial sector oversight, financial safety nets, and central bank governance (including NBE Board appointments and recapitalization).
Selected economic indicators (2023/24–2030/31)
- Output
- Real GDP growth (%): 2023/24: 8.1; 2024/25: 9.2; 2025/26: 7.8; 2026/27: 8.2; 2027/28: 8.0; 2028/29: 7.7; 2029/30: (not shown); 2030/31: (not shown)
- Prices
- Inflation - average (%): 2023/24: 26.6; 2024/25: 16.0; 2025/26: 11.7; 2026/27: 12.3; 2027/28: 6.8; 2028/29: 6.7
- General government finances
- Revenue (% GDP): 2023/24: 7.3; 2024/25: 10.8; 2025/26: 11.4; 2026/27: 11.8; 2027/28: 12.1; 2028/29: 12.2
- Expenditure (% GDP): 2023/24: 9.5; 2024/25: 12.0; 2025/26: 14.1; 2026/27: 13.5; 2027/28: 14.0; 2028/29: (not shown)
- Fiscal balance, including grants (% GDP): 2023/24: -2.0; 2024/25: -1.2; 2025/26: -1.4; 2026/27: -1.6
- Public debt (% GDP)1: 2023/24: 35.5; 2024/25: 50.5; 2025/26: 45.3; 2026/27: 40.8; 2027/28: 37.2; 2028/29: 34.0; 2029/30: 31.2; 2030/31: 28.6
- Money and Credit
- Broad money (% change): 2023/24: 35.2; 2024/25: 30.3; 2025/26: 25.3; 2026/27: 23.9; 2027/28: 19.2; 2028/29: 18.4; 2029/30: 19.9; 2030/31: 19.9
- Credit to private sector and state-owned enterprises (% change)2: 2023/24: 9.3; 2024/25: -9.7; 2025/26: 55.9; 2026/27: 24.8; 2027/28: 23.6; 2028/29: 24.1; 2029/30: 23.2; 2030/31: 19.1
- Balance of payments
- Current account (% GDP): 2023/24: -2.9; 2024/25: -1.1; 2025/26: -2.5; 2026/27: -1.3; 2027/28: -1.5; 2028/29: -2.7
- FDI (%GDP): 2023/24: 1.9; 2024/25: 3.2; 2025/26: 2.9; 2026/27: 3.0; 2027/28: 3.1
- Reserves (in months of imports): 2023/24: 0.7; 2024/25: 1.7; 2025/26: 2.1; 2026/27: 2.7; 2027/28: 3.5; 2028/29: 3.7; 2029/30: 3.8
- External debt (% GDP): 2023/24: 15.8; 2024/25: 31.8; 2025/26: 29.9; 2026/27: 27.1; 2027/28: 24.5; 2028/29: 21.4; 2029/30: 18.7; 2030/31: 16.7
- Exchange rate
- Real effective exchange rate (% change, end of period, depreciation –): 2023/24: 12.4; 2024/25: -44.2; 2025/26: …
Footnotes from table:
- 1/ Public and publicly guaranteed external debt, which includes long-term foreign liabilities of NBE and external debt of Ethio-Telecom. Does not include expected debt relief.
- 2/ Projections from 24/25 include impact of CBE recapitalization.
Press Release No. 26/235, July 1, 2026.