Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector
The Ethiopian economy continued its strong expansion in FY14 with real GDP growing by 10.3 percent. Growth was driven mainly by the services sector from the supply side and public investment from the demand side. At the same time, inflation has rem...
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| Format: | Report |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/07/24756616/fourth-ethiopia-economic-update-overcoming-constraints-manufacturing-sector http://hdl.handle.net/10986/22802 |
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okr-10986-228022021-04-23T14:04:10Z Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector World Bank Group LIVING STANDARDS TOTAL REVENUE MONETARY POLICY CAPITAL MARKETS REGULATORY FRAMEWORK UNEMPLOYMENT RATES ECONOMIC GROWTH OIL PRICE PRODUCTION LAGS NATIONAL ECONOMY STRUCTURAL CHANGE DISPOSABLE INCOME INCOME EXPECTATIONS REAL GDP EXCHANGE GOVERNMENT REGULATION ECONOMIC DEVELOPMENTS GDP PER CAPITA LIQUIDITY EXPORTS DOMESTIC MARKET POLITICAL ECONOMY FISCAL POLICY WELFARE BONDS INCENTIVES DEVALUATION CAPACITY BUILDING MOV REAL INCOME INPUTS PAYMENTS FREE TRADE INFLATION REGIONAL PRODUCTIVITY TRENDS SAFETY NETS ECONOMIC OUTLOOK DEVELOPMENT SMALL BUSINESS OIL PRICES TOTAL FACTOR PRODUCTIVITY TECHNICAL ASSISTANCE COSTS PER CAPITA INCOME GOVERNMENT REGULATIONS EXPORT GROWTH COMMERCIAL BANK MONEY RENT DEVELOPMENT STRATEGIES FIXED COSTS PRODUCTIVITY INDUSTRIALIZATION FAILURES MONOPOLY CRITERIA PRICE DECLINES DEBT MARKETS NET EXPORTS INCOME LEVELS POTENTIAL OUTPUT ENTRY BARRIERS TAX REVENUES DIVIDENDS UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT INVENTORY FINANCE TAXES UNEMPLOYMENT PRODUCTIVITY GROWTH CONSUMPTION HUMAN CAPITAL VALUE ADDED CAPITAL WAGES UNEMPLOYMENT RATE FUTURE VALUE BENCHMARKING COMPETITIVENESS CREDIT TREASURY BILLS TRADE DEFICIT DEVELOPMENT STRATEGY COMPARATIVE ADVANTAGES DEMAND ECONOMY AGRICULTURE CONSUMERS The Ethiopian economy continued its strong expansion in FY14 with real GDP growing by 10.3 percent. Growth was driven mainly by the services sector from the supply side and public investment from the demand side. At the same time, inflation has remained in single digits for the last two years on account of tighter monetary policy and lower international commodity prices. However, in recent months in 2015, domestic food prices are increasing partially as a result of shortage rainfall during the short rainy season. On the fiscal side, the budgetary stance at the general government level has been cautious. In an effort to adjust for the rising cost living, the FY15 budget incorporates an increase in public sector salaries after years of no increases which could also be the first step to adjust the balance between capital and recurrent expenditure. The salary increase accompanied by a supplementary budget in the middle of the fiscal year could potentially increase the budget deficit. The current account balance weakened. The deterioration is on account of a worsening trade deficit which was driven by weak export performance and large imports of capital goods for public investment programs. Goods exports showed positive growth in 2013-14 but rates remained far below their historical growth; furthermore, export growth fell into negative territory again in the last quarter of 2014 and first quarter of 2015. The strong economic growth in the past decade helped to reduce poverty significantly. The poverty headcount, measured by the national poverty line, fell from 38.7 percent in 2005 to 29.67 percent in 2011. Measured with the international poverty line (US$1.25 per day) Ethiopia saw the second fastest rate of reduction in Africa. Economic growth, particularly in agriculture, has been an important driver of poverty reduction in the last decade. Favorable weather conditions and improving terms of trade for rural producers have been reasons of this past trend supported by strong improvements in access to basic services and rural safety nets. Low levels of inequality have been maintained with the Gini coefficient remaining stable at 0.30. 2015-11-02T23:16:22Z 2015-11-02T23:16:22Z 2015-07-08 Report http://documents.worldbank.org/curated/en/2015/07/24756616/fourth-ethiopia-economic-update-overcoming-constraints-manufacturing-sector http://hdl.handle.net/10986/22802 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Economic & Sector Work :: Economic Updates and Modeling Economic & Sector Work Africa Ethiopia |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
LIVING STANDARDS TOTAL REVENUE MONETARY POLICY CAPITAL MARKETS REGULATORY FRAMEWORK UNEMPLOYMENT RATES ECONOMIC GROWTH OIL PRICE PRODUCTION LAGS NATIONAL ECONOMY STRUCTURAL CHANGE DISPOSABLE INCOME INCOME EXPECTATIONS REAL GDP EXCHANGE GOVERNMENT REGULATION ECONOMIC DEVELOPMENTS GDP PER CAPITA LIQUIDITY EXPORTS DOMESTIC MARKET POLITICAL ECONOMY FISCAL POLICY WELFARE BONDS INCENTIVES DEVALUATION CAPACITY BUILDING MOV REAL INCOME INPUTS PAYMENTS FREE TRADE INFLATION REGIONAL PRODUCTIVITY TRENDS SAFETY NETS ECONOMIC OUTLOOK DEVELOPMENT SMALL BUSINESS OIL PRICES TOTAL FACTOR PRODUCTIVITY TECHNICAL ASSISTANCE COSTS PER CAPITA INCOME GOVERNMENT REGULATIONS EXPORT GROWTH COMMERCIAL BANK MONEY RENT DEVELOPMENT STRATEGIES FIXED COSTS PRODUCTIVITY INDUSTRIALIZATION FAILURES MONOPOLY CRITERIA PRICE DECLINES DEBT MARKETS NET EXPORTS INCOME LEVELS POTENTIAL OUTPUT ENTRY BARRIERS TAX REVENUES DIVIDENDS UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT INVENTORY FINANCE TAXES UNEMPLOYMENT PRODUCTIVITY GROWTH CONSUMPTION HUMAN CAPITAL VALUE ADDED CAPITAL WAGES UNEMPLOYMENT RATE FUTURE VALUE BENCHMARKING COMPETITIVENESS CREDIT TREASURY BILLS TRADE DEFICIT DEVELOPMENT STRATEGY COMPARATIVE ADVANTAGES DEMAND ECONOMY AGRICULTURE CONSUMERS |
| spellingShingle |
LIVING STANDARDS TOTAL REVENUE MONETARY POLICY CAPITAL MARKETS REGULATORY FRAMEWORK UNEMPLOYMENT RATES ECONOMIC GROWTH OIL PRICE PRODUCTION LAGS NATIONAL ECONOMY STRUCTURAL CHANGE DISPOSABLE INCOME INCOME EXPECTATIONS REAL GDP EXCHANGE GOVERNMENT REGULATION ECONOMIC DEVELOPMENTS GDP PER CAPITA LIQUIDITY EXPORTS DOMESTIC MARKET POLITICAL ECONOMY FISCAL POLICY WELFARE BONDS INCENTIVES DEVALUATION CAPACITY BUILDING MOV REAL INCOME INPUTS PAYMENTS FREE TRADE INFLATION REGIONAL PRODUCTIVITY TRENDS SAFETY NETS ECONOMIC OUTLOOK DEVELOPMENT SMALL BUSINESS OIL PRICES TOTAL FACTOR PRODUCTIVITY TECHNICAL ASSISTANCE COSTS PER CAPITA INCOME GOVERNMENT REGULATIONS EXPORT GROWTH COMMERCIAL BANK MONEY RENT DEVELOPMENT STRATEGIES FIXED COSTS PRODUCTIVITY INDUSTRIALIZATION FAILURES MONOPOLY CRITERIA PRICE DECLINES DEBT MARKETS NET EXPORTS INCOME LEVELS POTENTIAL OUTPUT ENTRY BARRIERS TAX REVENUES DIVIDENDS UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT INVENTORY FINANCE TAXES UNEMPLOYMENT PRODUCTIVITY GROWTH CONSUMPTION HUMAN CAPITAL VALUE ADDED CAPITAL WAGES UNEMPLOYMENT RATE FUTURE VALUE BENCHMARKING COMPETITIVENESS CREDIT TREASURY BILLS TRADE DEFICIT DEVELOPMENT STRATEGY COMPARATIVE ADVANTAGES DEMAND ECONOMY AGRICULTURE CONSUMERS World Bank Group Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector |
| geographic_facet |
Africa Ethiopia |
| description |
The Ethiopian economy continued its
strong expansion in FY14 with real GDP growing by 10.3
percent. Growth was driven mainly by the services sector
from the supply side and public investment from the demand
side. At the same time, inflation has remained in single
digits for the last two years on account of tighter monetary
policy and lower international commodity prices. However, in
recent months in 2015, domestic food prices are increasing
partially as a result of shortage rainfall during the short
rainy season. On the fiscal side, the budgetary stance at
the general government level has been cautious. In an effort
to adjust for the rising cost living, the FY15 budget
incorporates an increase in public sector salaries after
years of no increases which could also be the first step to
adjust the balance between capital and recurrent
expenditure. The salary increase accompanied by a
supplementary budget in the middle of the fiscal year could
potentially increase the budget deficit. The current account
balance weakened. The deterioration is on account of a
worsening trade deficit which was driven by weak export
performance and large imports of capital goods for public
investment programs. Goods exports showed positive growth in
2013-14 but rates remained far below their historical
growth; furthermore, export growth fell into negative
territory again in the last quarter of 2014 and first
quarter of 2015. The strong economic growth in the past
decade helped to reduce poverty significantly. The poverty
headcount, measured by the national poverty line, fell from
38.7 percent in 2005 to 29.67 percent in 2011. Measured with
the international poverty line (US$1.25 per day) Ethiopia
saw the second fastest rate of reduction in Africa. Economic
growth, particularly in agriculture, has been an important
driver of poverty reduction in the last decade. Favorable
weather conditions and improving terms of trade for rural
producers have been reasons of this past trend supported by
strong improvements in access to basic services and rural
safety nets. Low levels of inequality have been maintained
with the Gini coefficient remaining stable at 0.30. |
| format |
Report |
| author |
World Bank Group |
| author_facet |
World Bank Group |
| author_sort |
World Bank Group |
| title |
Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector |
| title_short |
Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector |
| title_full |
Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector |
| title_fullStr |
Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector |
| title_full_unstemmed |
Fourth Ethiopia Economic Update : Overcoming Constraints in the Manufacturing Sector |
| title_sort |
fourth ethiopia economic update : overcoming constraints in the manufacturing sector |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/07/24756616/fourth-ethiopia-economic-update-overcoming-constraints-manufacturing-sector http://hdl.handle.net/10986/22802 |
| _version_ |
1764451834923057152 |