Ethiopia Economic Update : The Inescapable Manufacturing-Services Nexus
Ethiopia’s gross domestic product (GDP) growth is estimated to have rebounded to 10.9 percent in FY2017. According to official statistics, Ethiopia’s annual rate of economic growth, which averaged 10.3 percent over 2005/06-2015/16 (compared with th...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/811791526447120021/The-inescapable-manufacturing-services-nexus-exploring-the-potentialof-distribution-services http://hdl.handle.net/10986/29919 |
| Summary: | Ethiopia’s gross domestic product (GDP)
growth is estimated to have rebounded to 10.9 percent in
FY2017. According to official statistics, Ethiopia’s annual
rate of economic growth, which averaged 10.3 percent over
2005/06-2015/16 (compared with the regional average of 5.4
percent), slowed to 8 percent in FY2016 due to
drought-related lower agricultural production. With
agricultural recovery, gross domestic product (GDP) growth
rebounded in FY2017. The pursuit of prudent fiscal policy,
with a fiscal deficit at 3.4 percent of GDP, should help
keep inflation under control, providing monetary conditions
remain tight in the aftermath of the devaluation of the Birr
in October 2017. Key challenges relate to poor export
performance (Ethiopia’s growth has been driven by investment
followed by private consumption) and weak trade balance,
which reflect the lack of external competitiveness and the
vulnerability to terms of-trade shocks. The rising risk of
external debt distress may affect Ethiopia’s access to
external finance. These developments require continued
policy adjustment to crowd-in the private sector and
strengthen Ethiopia’s competitiveness. Part one of this
Economic Update, on recent economic developments and
outlook, discusses Ethiopia’s growth strategy, emphasizing
the sustainability of the country’s investment-focused and
export-led growth model. Part two looks at the interlinkages
between manufacturing and services, with a special focus on
the role of distribution services in promoting Ethiopia’s
export competitiveness and eventually its structural transformation. |
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