This chapter presents economic growth history of ethiopia. Effect of inflation on economic growth of ethiopia. The relationship between inflation, money supply and. Public protests disrupted the nation in 2016 in the oromia and amhara regions, with the protesters citing concerns about political and economic marginalization. Though this is doubtful, it is unquestionable that at least from the time of athanasius, patriarch of alexandria in the fourth century, ethiopia has remained staunchly christian. Greater economic growth is key to reducing poverty, the report notes. Economic development refers to multidimensional process of reorientation and. Ethiopia economic outlook african development bank. Introduction currently the objective of any developing country is to achieve sustainable economic development. This is double the sub sahara africa and triples the world average growths over this period and has led to ethiopia being rated as one of the fastest growing economies in the world. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10.
The relationship between inflation, money supply and economic growth in ethiopia. Economic development ethiopia issues, growth, economic. Ethiopia has registered remarkable economic performance with annual growth averaging 10. This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart. Although data showing healthy export growth points to a good start to fiscal year 2019a2020 july 2019july 2020, the outbreak of coronavirus will be taking a heavy toll on the economy. Poverty defined as the number of people unable to attain the minimum living standard 3. Some consensus exists, suggesting that macroeconomic stability, specifically defined as low inflation, is positively related to economic growth. Thus, gtp ii is primarily considered to be an important milestone. Factors that determine the growth of micro and small.
Pdf determinants of food security in the oromiya region of ethiopia. Ethiopias growth miracle, coupled with its large population and. Just to reach south africas level ethiopia needs a 10% annual growth for 33 years. Economic growth and development in ethiopia springerlink. The manufacturing sector is seen as the success of ethiopia s growth.
Growth and transformation plan ii united nations in ethiopia. Sources of inflation and economic growth in ethiopia. Factors that determine the growth of micro and small enterprises. Pdf determinant of economic growth in case of ethiopia. Agriculture and the economic transformation of ethiopia. In recent years, however, the economy has seen substantial economic. However, there are also some other indirect factors, which affect the causal relationship between exports and economic growth.
It in particular examines how fdi affects gdp growth, both directly and also conditioning on trade liberalization that ethiopia adopted in early 1990s. The economic outlook is positive, and real gdp growth is projected to stabilize at 7. Ethiopias economic growth performance african development bank. Further, ethiopia seems to have been one of the first countries to accept christianity. The manufacturing sector is seen as the success of ethiopias growth, and its development to a large extent the product of an activist developmental state. The country has experienced fast economic growth in the last decade, averaging around 10% a year. This economic growth was higher than the average ssa economic growth. This study investigated the causal relationship between export and economic growth in ethiopia using quarterly data on real gdp and real export for the period 199798 201011 from national bank of ethiopia.
Industrial policy and development in ethiopia brookings institution. Recent economic developments international monetary. Ethiopia remains heavily dependent on agriculture as its main source of output, ontinues to make overall economic. Ethiopias growth miracle, coupled with its large population and significant land mass, has attracted. The paper starts with an overview of economic growth and the change in the domestic economic structure. Ethiopia s economy experienced strong, broadbased growth averaging 9. In 20, the economic growth recorded in ethiopia was 9. Ethiopias steady economic growth leads to poverty reduction.
This page has economic forecasts for ethiopia including a longterm outlook for the next decades, plus mediumterm expectations for the next four quarters and shortterm market predictions for the next release affecting the ethiopia economy. But a new ethiopia is emerging from troubled times and the latest international monetary fund imf forecast says ethiopia will be the fastestgrowing economy in subsaharan africa in 2018. Ethiopia s real gross domestic product gdp growth decelerated to 7. The major objective of gptii is to serve as a springboard towards realizing the national vision of becoming a low middleincome country by 2025, through sustaining the rapid, broadbased, and inclusive economic growth, which accelerates economic transformation and the journey. Productive capacity and economic growth in ethiopia the united. Ethiopia gross domestic product gdp growth rate 2021. Co integration and causality analysis fitsum sharew denbel, yilkal wassie ayen and teshome adugna regasa phd senior expert, ethiopian shipping and logistics service enterprise, addis ababa ethiopia. Road sector development and economic growth in ethiopia. Moreover, the government of ethiopia is committed to rapid growth of agriculture as a means of accelerating the economic transformation and reducing poverty. The paper starts with an overview of ethiopia s economic growth and the change in the domes tic economic structure. The poverty headcount, measured by the national poverty line, fell from 38. Productive capacity and economic growth in ethiopia. This growth was driven by government investment in infrastructure, as well as sustained.
The assumption that there is a uniquely correct or at least a. An introduction to the economic history of ethiopia, from. Ethiopia macroeconomic handbook 2019 cepheus growth. Economic growth without structural transformation the. Ricardo in his study in 1817, notes that trade facilitates products output with a. Pdf the paper performs a qualitative narrative appraisal of the existing empirical literature on the key macroeconomic determinants of. Descriptive analysis of macroeconomic indicators since 1992 is also made. The strong economic growth in the past decade helped to reduce poverty significantly. As you can see in the table 1 below in 2006 the annual economic growth of ethiopia was 11. The gross domestic product gdp in ethiopia expanded 9 percent in 2018 from the previous year. Ethiopia needs to put in place and implement policies that lead to faster and greater economic growth to be able to make further substantial dents on the poverty levels, said nora carina dihel, senior economist and coauthor of the report. The ethiopian economy has experienced impressive growth performance over the last decade with average gdp growth rate of 11 %, which is about double of.
To analyze the stock of achievements in the road transport sector of ethiopia, time. Economic growth, development and poverty in ethiopia. The aim of this paper is to evaluate the impact of individual types of taxes on the economic growth by utilizing regression analysis on the oecd countries for the period of 20002011. Growth should benefit from the homegrown economic reform program, which seeks to address macroeconomic imbalances and unlock structural. The statistic shows the growth in real gdp in ethiopia from 2009 to 2019, with projections up until 2021. Ethiopia is now africas fastest growing economy cnn. Growth and transformation plan ii gtp ii is ethiopias fiveyear development plan for 20152020. To reach usa levels it needs this kind of growth for 52 years. The major objective of gtp ii is to serve as a spring board towards realizing the national vision of becoming a low middleincome country by 2025, through sustaining the rapid, broad based and inclusive economic growth, which accelerates economic transformation and the journey towards the countrys renascence. Ethiopias economy experienced strong, broadbased growth averaging 9. Fiscal policy and economic growth in ethiopia getachew petros osebo lecturer, department of the economics, wolaita sodo university p. Informed by these experiences and having recognized future opportunities, ethiopia has accepted with strong government commitments and. Ethiopia gdp annual growth rate 19812018 data 2019. In 2019, ethiopias real gross domestic product grew by around 8.
O box 8, wolaita sodo, ethiopia abstract the purpose of the paper is to examine the impact of fiscal policy variables on. World bank national accounts data, and oecd national accounts data files. The ethiopians claim that their conversion dates from apostolic times. In the same way, after four years, that means in 2010, the country has achieved 10. Effects of tax and government expenditure on economic growth in ethiopia. Not surprisingly, there has been considerable debate on the existence and nature of the inflation and growth relationship. This paper measures the impact of foreign direct investment fdi on economic growth in ethiopia based on annual time series data over the period 1974 to 2011. So ethiopia is far far behind and is still terribly poor, but with. The federal democratic republic of ethiopia and the imf. The main objective of this paper is to test that, whether inflation is an indicator or obstacle for economic growth of ethiopia. The causality analysis between export and economic growth. Pdf infrastructure development and economic growth in.
In brief, we find that ethiopias rapid economic growth, concentrated in agriculture and services, was driven by substantial public infrastructure investment and supported by a. Ethiopias economy is concentrated in the services and agriculture sectors. Based on the findings of the aforementioned analysis, the study will come up with recommendations for improved performance of the road sector development on the overall and sector specific economic growth. Determining the effect of inflation on the economic growth of one country must be considered as a prior issue to build up a healthy economy. For more than a decade before 2016, gdp grew at a rate between 8% and 11% annually one of the fastest growing states among the 188 imf member countries. Ethiopia the second most populous country in africa is a oneparty state with a planned economy. The interaction between growth and inflation is one of the macroeconomic problems. Economic growth and poverty in ethiopia economic growth refers to an increase in the national income or per capita income 2. Ethiopia is a highly agrarian economy, with a long history of substantial food insecurity. Selection of key themes for ethiopia developmental state via 5 year plans rapid industrialisation strategy key role of logistics infrastructure in growth building tourism around ethiopian airlines fragile state political unrest emergency rule o. Degefu department of statistics, hawassa university, hawassa, ethiopia abstract micro and smallscale enterprises have key roles to ensure economic growth and reduceof hawassa city, ethiopia poverty in developing countries. Ethiopia aims to reach lowermiddleincome status by 2025. Determinant of economic growth in case of ethiopia.
Ethiopias real gross domestic product gdp growth decelerated to 7. This, in turn has, helped in gaining replicable development experiences over the last decade and half. As discussed in chapter three a number of factors including investment, trade, economic policy, institution and many others affect economic performance of countries. Ethiopia economy gdp, inflation, cpi and interest rate. Impact of foreign direct investment on economic growth of. The impact of taxation is integrated into growth models by its impact on the individual growth variables, which are capital accumulation and investment, human. Ethiopia a view of the capital of ethiopia, addis ababa.