The sharp budget hike follows economic reforms backed by the IMF, including debt restructuring and currency floatation. Officials aim to boost growth and resilience. The budget’s focus includes production, stability, and helping communities hit by crises.
Ethiopia unveils a record-breaking 2 trillion birr budget for 2025/26, marking a 31% rise to boost security, productivity, and disaster relief under IMF reforms.
Ethiopia’s cabinet approves a 2 trillion birr ($15B) budget for 2025/26—a 31% increase focused on security, productivity, and disaster relief under IMF‑backed reforms.
Ethiopia’s cabinet has approved a historic 2 trillion birr (~$15 billion) budget for the 2025/26 fiscal year—a 31% increase from the 971.2 billion birr allocation in 2024/25. This marks the largest year-over-year expansion in Ethiopia’s history, aligned with ongoing economic reforms, including currency floatation and debt restructuring under the IMF.
📈 Year-on-Year Budget Growth
Fiscal Year
Budget Allocation
Year-on-Year Increase
2024/25
971.2 billion birr
+21%
2025/26
2 trillion birr
+31%
This doubling of the budget reflects Ethiopia’s ambitious roadmap under its IMF-backed reform program.
🎯 Strategic Priorities of the 2025/26 Budget
National Security: Enhanced funding to maintain stability and peace across the country.
Production & Productivity: Increased investment in agriculture, manufacturing, and infrastructure.
Disaster Response: Expanded support for communities affected by climate events, conflicts, and other emergencies.
These funding allocations aim to stimulate economic growth, generate employment, and improve living standards across Ethiopia.
🌍 Context & Implications
Ethiopia’s bold budget move underscores its commitment to fiscal discipline while pursuing key reforms:
Currency Floatation: A shift to a market-driven exchange rate policy to enhance competitiveness and foreign exchange resilience.
Debt Restructuring: Continued negotiations with creditors under the IMF’s Extended Credit Facility, aiming for debt sustainability.
By significantly increasing spending, the government signals both short-term relief and long-term investment in national stability and productivity.
Ethiopia’s decision to nearly double its national budget marks a major turning point. By prioritizing security, production, and disaster resilience—within an IMF framework—it is making a decisive bet on sustainable, inclusive growth.
