Ethiopia Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Ethiopia Country Risk Report
Product Price
$1,195.00
  • Ethiopia will remain one of the highest growth economies in Africa over 2016 and 2017 as the state drives large-scale investment in the economy. We expect the government's continued investment into improving infrastructure and the agricultural sector will provide opportunities for the population to become increasingly engaged in the economy.

  • We expect monetary policy in Ethiopia to remain loose over the year ahead as the National Bank of Ethiopia increases money available for lending to the government. Furthermore, we do not expect the National Bank of Ethiopia to devalue the currency given the risk associated with a pass through to inflation.

  • The Ethiopian government will drive up capital expenditure in the next two years in line with its ambitious budget announced in 2015. Ethiopia's budget deficit will rise to a peak of 3.1% of GDP over the next two years as the government pushes forward with the second phase of its Growth and Transformation Plan.

  • We expect Ethiopia's current account balance to remain firmly in deficit over the next two years as imports of capital goods strongly outweigh exports from the country. Official aid in the wake of the drought will provide substantial foreign exchange as support for the country's sizeable current account deficit.

  • Political risk in Ethiopia will remain heightened as the government pushes the predominantly agrarian economy towards industrialisation. Furthermore, we expect tensions to rise between the government and its citizens as the government exerts excessive pressure on the public to make way for the expansion of the capital, Addis Ababa.

Key Risks:

  • While inflation has slowed markedly from the high levels witnessed in 2011/12, inflation will continue to represent a key risk to macroeconomic stability. Food price inflation in particular will remain a concern, with unpredictable weather a constant threat.

  • As is the case for many African nations, Ethiopia is highly susceptible to volatility in global markets, particularly commodity prices (notably coffee and gold), which can in turn pose both upside and downside risks to export revenues and headline growth.

  • Public sector debt levels have risen dramatically since the implementation of government's Growth and Transformation Plan and the need for government financing will increase. Government financing needs will rise as public sector investment continues under Ethiopia's aggressive growth strategy.

Macroeconomic Forecasts (Ethiopia 2014-2018)
Indicator 2014e 2015e 2016f 2017f 2018f
e/f= BMI estimate/forecast. Source: National Sources/BMI
Nominal GDP, USDbn 53.2 61.6 70.0 78.5 87.4
Real GDP growth, % y-o-y 10.3 8.1 7.8 7.6 7.7
Consumer price inflation, % y-o-y, eop 7.1 11.8 10.0 8.5 8.5
Exchange rate ETB/USD, eop 20.20 21.18 22.20 23.30 24.50
Budget balance, % of GDP -2.6 -2.7 -3.1 -3.1 -3.0
Current account balance, % of GDP -7.2 -10.5 -12.2 -11.8 -11.1
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Strong Economic Growth Despite Floods
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Monetary Policy
10
Food Insecurity To Spur Rising Inflation
10
Monetary Policy Framework
11
Fiscal Policy And Public Debt Outlook
12
Infrastructure Investment And Food Insecurity To Keep Fiscal Deficit Wide
12
Structural Fiscal Position
13
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES 2014
13
External Trade And Investment Outlook
14
Persistent Deficit To Fuel Debt Load
14
Outlook On External Position
15
TABLE: TOP FIVE GOODS EXPORTS IN 2015
15
TABLE: TOP FIVE IMPORTS IN 2014
16
Chapter 2: 10-Year Forecast
17
The Ethiopian Economy To 2025
17
Strong Growth In The Next Decade, But Limits To State Model
17
TABLE: LONG-TERM MACROECONOMIC FORECASTS
17
Chapter 3: Political Outlook
19
SWOT Analysis
19
BMI Political Risk Index
19
Domestic Politics
20
Public Dissent And Regional Terrorism Will Fuel Security Risk
20
TABLE: POLITICAL OVERVIEW
20
Long-Term Political Outlook
22
More Armed Conflict Likely This Decade
22
Chapter 4: Operational Risk
25
SWOT Analysis
25
Operational Risk Index
25
Operational Risk
26
TABLE: OPERATIONAL RISK
26
Economic Openness
27
TABLE: TOP 5 IMPORT PRODUCTS & IMPORT PARTNERS, 2010-2014, USDMN
27
TABLE: FREE TRADE AGREEMENTS
28
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
29
Availability Of Labour
31
TABLE: SSA - AVAILABILITY OF LABOUR
32
TABLE: ETHIOPIA'S TOP 10 SOURCE COUNTRIES FOR MIGRANT WORKERS
33
Chapter 5: BMI Global Macro Outlook
37
Global Macro Outlook
37
Summer Of Risk
37
TABLE: GLOBAL ASSUMPTIONS
37
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
38
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
39
TABLE: MACROECONOMIC DATA & FORECASTS
41

Assess your risk exposure in Ethiopia with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Ethiopia with confidence.

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