Ethiopia has become Africa’s fifth-largest economy after revising its national accounts, lifting measured output to $210.7 billion for the fiscal year that ended in July.
Finance Minister Fitsum Assefa announced the new figures on 4 November, saying gross domestic product for 2025/26 stood at 31.86 trillion birr, equivalent to $210.7 billion. The previous fiscal year, 2024/25, was revised upwards by 59.2 percent to $201.4 billion, from an earlier estimate of 15.09 trillion birr.
The change follows a rebasing exercise that replaced Ethiopia’s 2015/16 benchmark with 2024/25, bringing the national accounts closer to the structure of the economy as it is today. The government said the old base year no longer captured the economy’s transformation, including the growth of digital finance and services.
The revised calculations draw on a recent agriculture census, household surveys and, for the first time, data from state-owned enterprises and non-profit institutions. They also capture previously uncounted informal activity. Real growth for 2025/26 is estimated at 7.7 percent under the new series.
On the new figures, Ethiopia sits behind only South Africa, Egypt, Nigeria and Algeria in Africa, ahead of Morocco and Kenya. The ranking is the government’s own stated position, however: the revised accounts have not yet been incorporated into the International Monetary Fund’s internationally comparable estimates, and the government has not clearly explained the exchange rate used to calculate the dollar figures.
The bigger number also flatters Ethiopia’s public finances on paper. The country’s debt of about 8.73 trillion birr falls from 45.3 percent of GDP under the old measure to 27.4 percent under the new one, according to Oxford Economics. That is a mechanical effect of a larger denominator, not a reduction in what the government owes. Ethiopia is still restructuring its loans under the G20 Common Framework, and the improved ratios arrive as IMF staff prepare the sixth review of its reform programme.
The rebasing reverses a sharp fall in Ethiopia’s dollar-denominated GDP after the birr was floated in July 2024 under a $3.4 billion IMF programme, a move that had allowed Kenya to overtake it in recent IMF rankings. Per-capita income rises towards $1,500 on the new base, which would shift Ethiopia from the World Bank’s low-income bracket into lower-middle-income status.
Sources: Bloomberg, via Moneyweb (https://www.moneyweb.co.za/news/africa/ethiopia-becomes-top-five-african-economy-after-data-overhaul/); Africa Briefing (https://africabriefing.com/ethiopia-now-africas-fifth-largest-economy/).
File photo of Addis Ababa, not tied to the announcement.
