On July 3,2025, the Ethiopian Parliament approved a total budget of Birr 1.92 trn (~ $14.6bn) for the 2025/26 fiscal year. This marks a 34% nominal increase from the previous year’s budget of Birr 1.4trn, which included a mid-year supplementary allocation of Birr 463bn. After adjusting for the projected inflation rate of 11.9% by end-June 2026, the real growth of the national budget is estimated at approximately 22.5%, reflecting a notable expansion in fiscal space and public spending capacity. This significant increase signals the government’s optimism regarding improved revenue performance, with total tax and non-tax revenues projected to grow by 60% in nominal terms. In addition, external borrowing is expected to rise to Birr 139 bn.