The Ethiopian economy stands at a critical juncture at the start of 2023, following two years of conflict that brought immense humanitarian, social, and material losses. In the face of major economic challenges, whether macro policies in the coming year take a mostly ‘status quo approach’ or instead follow a series of ‘breakthrough policies’ is a key unknown for the period ahead. To assess which of these divergent paths may lie ahead, we first take stock of Ethiopia’s latest macroeconomic indicators and conditions. We then lay out two potential macro scenarios involving either ‘status quo policies’ or ‘breakthrough policies’ and chart out how each scenario could unfold alongside the attendant implications for growth, inflation, budgets, banking, and foreign exchange conditions in the two cases. Reflecting some recent policy signals,….

Read the Review
Share