Ethiopia’s GDP Growth Slows To 7%

Ethiopia’s GDP Growth Slows To 7%

From Business Day Live

Ethiopia’s economy is likely to grow 7 percent past decade. To push that rate higher, the government needs to change policy to encourage private investment, the World Bank said.

While 7 percent gross domestic product (GDP) growth would be the envy of finance ministers in western economies, it would fall short of an average rate of 10.6 percent that Ethiopia said it achieved in the last 10 years, as a result of its state-interventionist policies.

It would also be insufficient to meet Ethiopia’s target of reaching middle-income status by 2025. The bank says that goal is still within reach, however, if the state shifts the balance from public to more private investment.

“We still think growth could be robust — in the order of 7 percent in the medium term would not be unexpected,” said the bank’s lead economist in Ethiopia, Lars Christian Moller.

The World Bank estimates that Ethiopia’s economy grew 7 percent in the fiscal year July 8 last year to July 7 this year, below the government’s 10 percent estimate.

Moller said Ethiopia’s $43 billion economy would need to repeat its performance of the last decade to become a middle-income country — defined by the bank as one with a gross national income (GNI) per capita of about $1,430 — in 12 years.

The World Bank put Ethiopia’s GNI at $410 last year.

Read more at Business Day Live.