The ECF arrangement was approved by the IMF Executive Board on July 29, 2024, for an initial total amount of about $3.4 billion at the time.
Subject to approval by IMF management and the Executive Board in the coming weeks, the fifth review would make available about $468 million. The disbursement would bring total IMF financial support under the arrangement to about $2.65 million.
Mission head Mr Alvaro Piris said the IMF staff team and the Ethiopian authorities had reached an agreement after continued progress in the implementation of Ethiopia’s Homegrown Economic Reform Agenda.
Piris said macroeconomic outcomes had remained favourable through to the onset of the war in the Middle East. Output indicators, exports, reserves and government revenue all improved through early 2026, while inflation declined.
Piris said the war in the Middle East had created a significant external shock by disrupting trade, causing temporary fuel shortages and driving sharp increases in the price of imported fuel and fertiliser. Even so, Piris said economic activity appeared robust, with as-yet modest effects on output growth and consumer price inflation.
Piris also said risks to the outlook had risen because of increased global uncertainty and high commodity price volatility since the start of the war. Piris said pressures on growth, external and domestic balances, and inflation were expected to remain moderate if the shock did not persist for a prolonged period.
Piris said strong policy implementation remained essential to consolidate macroeconomic stability. Piris said a tight monetary policy stance was still warranted to anchor inflation expectations, while further work to improve the functioning and transparency of the foreign exchange market would support external adjustment.
According to Piris, continued progress in domestic revenue mobilisation and prudent expenditure management would help protect fiscal sustainability while responding to new spending pressures.
Piris also said structural reforms remained important for stronger private sector-led growth, with priorities including improvement of the business climate, stronger financial sector resilience and deeper market reforms.
The IMF mission met Finance Minister Ahmed Shide, National Bank of Ethiopia Governor Eyob Tekalign, other senior officials, private sector representatives and development partners.
–IMF/ChannelAfrica–
