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. The paper starts with an overview of economic growth and the change in the domestic economic structure. Ethiopia has been one of the engines of africas economic growth for some time now. The ethiopian government has developed comprehensive agricultural and economic development plans that have contributed to the countrys substantial growth in agriculture, industry and services. The causality analysis between export and economic growth in. Section two explores the source of growth in ethiopia by specifying a cobbdouglas production function and estimating it using both macro and micro data. It is based on the information available at the time it was completed on september 5, 2014. Informed by these experiences and having recognized future opportunities, ethiopia has accepted with strong government commitments and. Copies of this report are available to the public from.
Agriculture and the economic transformation of ethiopia. Pdf infrastructure development and economic growth in ethiopia. At the contemporary periods, ethiopiaas economic growth transformed from single to double digit. The world bank public disclosure authorized ethiopia. Ethiopias location gives it strategic dominance as a jumping off point in the horn of africa, close to the middle east and its markets.
The economic outlook is positive, and real gdp growth is projected to stabilize at 7. Ethiopia is a fascinating country to use as a case study in economic growth and development according to a recent editorial in the financial times, ethiopia has transformed in 20 years from a famineravaged nation into a destination for savvy and wellknown private equity groups such as kkr. Between 2006 and 2014, average africa economic growth was 4. The international monetary fund has praised ethiopias remarkable progress over more than a decade, which has led to a significant reduction in poverty and improved living standards for many ethiopians. Has economic growth contributed to human development in. The paper starts with an overview of ethiopias economic growth and the change in the domes tic economic structure. Human choice and industrial development in ethiopia 5 1. Thereafter, high levels of foreign investment and the governments reform agenda will stimulate economic growth throughout 202124. Ethiopia economy gdp, inflation, cpi and interest rate. Productive capacity and economic growth in ethiopia.
Factors that determine the growth of micro and small enterprises. The causality analysis between export and economic growth. Article information, pdf download for has economic growth contributed to. Jan 04, 2019 growth in subsaharan africa is expected to be 3. Ethiopia economic outlook african development bank. Ethiopia is africas fastestgrowing economy world economic. Ethiopia is one of the fastest developing countries situated in the northeastern corner of africa. Over the past decade, ethiopias economic growth has been fluctuating. There has also been tremendous growth in the number, diversity and market share of private businesses in the ethiopian economy. For more than a decade before 2016, ethiopia grew at a rate between 8% and 11% annually one of the fastest growing states among the 188 imf member countries. Pdf effects of tax and government expenditure on economic growth in ethiopia. The studies have explored the prominent factors of economic growth using various econometric approaches. Ethiopia is driving economic growth through the governments laserlike focus on sectors such as manufacturing, energy and infrastructure.
Abstract ethiopias gross domestic product gdp growth is estimated to have rebounded to 10. Descriptive analysis of macroeconomic indicators since 1992 is also made. Economic growth and development in ethiopia springerlink. 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. The poverty headcount, measured by the national poverty line, fell from 38. To reach usa levels it needs this kind of growth for 52 years. 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. Ethiopia aims to reach lowermiddleincome status by 2025. Poverty defined as the number of people unable to attain the minimum living standard 3. Economic growth, development and poverty in ethiopia.
Ethiopia, having registered high economic growth since 2005 at an average 10. A notable example can be found in the grand ethiopian renaissance dam gerd where ethiopia plans to leverage the blue nile to become africas largest exporter of electricity. Ethiopia is africas fastestgrowing economy for 2019. Share of economic sectors in the gross domestic product gdp. Ethiopias real gross domestic product gdp growth, while still strong, decelerated to 7. The modeled results show a low expectation of gdp per capita under each of. 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. If managed proactively, urban population growth presents a huge opportunity to shift the structure and location of economic activity from rural agriculture to the larger and more diversified urban industrial and service sectors. The relationship between infrastructure development and economic growth is investigated for ethiopia during the period 197475201415.
This paper investigated empirical evidence on contributions of tax revenue for economic growth of. This is one of the fastest growing economies in the world. As discussed in chapter three a number of factors including investment, trade, economic policy, institution and many others affect economic performance of. Ethiopia the human capital index hci database provides data at the country level for each of the components of the human capital index as well as for the overall index, disaggregated by gender. Factors that determine the growth of micro and small.
Ethiopias growth has been driven by investment followed by private. The world bank team welcomes feedback on the ethiopia economic update. Ethiopian economic growth compared to sub saharan africa. 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. Ethiopias real gross domestic product gdp growth decelerated to 7. The result of the estimations is used to conduct a growth accounting. Just to reach south africas level ethiopia needs a 10% annual growth for 33 years. This economic growth was higher than the average ssa economic growth. The report includes countryspecific threeyear forecasts for major macroeconomic indicators, including commodity and financial markets. Ethiopia has registered remarkable economic performance with annual growth averaging 10. Ethiopia has experienced rapid economic growth since 2005, with gross domestic product gdp growing at an average rate of 10. Learn how the world bank group is helping countries with covid19 coronavirus.
Abstract the urban population in ethiopia is increasing rapidly. However, basic challenges such as unskilled labor, high transport costs. The growth equation further revealed that rainfall variability has a significant negative impact on economic growth as the. In the same way, after four years, that means in 2010, the country has achieved 10. As you can see in the table 1 below in 2006 the annual economic growth of ethiopia was 11. Accordingly, investments on growth enhancing sectors such as infrastructure and social. Ethiopia gdp annual growth rate 19812018 data 2019. Productive capacity and economic growth in ethiopia the united. The performances and challenges of growth and transformation. Population growth from 2008 to 2018 compared to previous year. Agriculture and the economic transformation of ethiopia africa portal. Ethiopia the second most populous country in africa is a oneparty state with a planned economy. 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. The role of financial instituions in economic growth of.
The role of financial instituions in economic growth of ethiopia. As you can see in the figure 2 below, the ethiopia economic growth8 was higher than the ssa countries economic growth. The world bank public disclosure authorized ethiopia growth. Ethiopia global economic prospects examines trends for the world economy and how they affect developing countries. The assumption that there is a uniquely correct or at least a.
The gross domestic product gdp in ethiopia expanded 9 percent in 2018 from the previous year. This, in turn has, helped in gaining replicable development experiences over the last decade and half. Share of economic sectors in the gdp in ethiopia 2018. Attention is given to the manufacturing sector as the success of ethiopias growth and trans. Over the past decade ethiopias economy has experienced an average 10% annual growth. The index measures the amount of human capital that a child born today can expect to attain by age 18, given the risks of poor health and poor. The country has embarked on an economic and social. Growth should benefit from the homegrown economic reform program, which seeks to address macroeconomic imbalances and unlock structural. Moreover, the government of ethiopia is committed to rapid growth of agriculture as a means of accelerating the economic transformation and reducing poverty.
According to official statistics, ethiopias annual rate of economic growth, which averaged 10. Growth and transformation plan gtp 201011201415 draft. Ethiopias economy experienced strong, broadbased growth averaging 9. This chapter presents economic growth history of ethiopia. Economic development ethiopia issues, growth, economic. The federal democratic republic of ethiopia and the imf. The strong economic growth in the past decade helped to reduce poverty significantly. Economic growth and poverty in ethiopia economic growth refers to an increase in the national income or per capita income 2. The second characteristic of ethiopia economic growth was fast economic growth. Growth and development in ethiopia economics tutor2u.
Ethiopia economy, politics and gdp growth summary the. This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart, statistics, economic. Maintaining a growth rate in agricultural gdp of six percent would provide enough employment growth to contribute to rapid economic transformation of the. Bordering eritrea, somalia, kenya, south sudan, and sudan, ethiopia is landlocked, and has been using neighboring djiboutis main port for the last two decades.
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