The Ethiopian Economics Association (EEA) has released Volume 10, Number 2 of its Quarterly Macroeconomic Updates on the Ethiopian Economy, offering key insights into the country’s fiscal performance during the first quarter of FY2024/25. The report reveals a 77% surge in government revenue and grants, driven primarily by tax collections, with indirect taxes contributing 77% of the record ETB 153.7 billion in tax revenues. Grants returned after a year-long gap, signaling renewed donor engagement, while non-tax revenues jumped 136.3% year-on-year, underlining their growing role in public finance.

Despite the revenue gains, the report points to rising expenditure pressures, with government spending increasing 40.2% in nominal terms, mainly due to higher operational costs and regional transfers. Capital spending, however, remained low and unevenly executed, raising concerns over project delays and planning capacity. The fiscal deficit reached ETB 20.97 billion, largely financed through concessional external loans, while domestic borrowing turned negative due to significant bank repayments, indicating a shift in financing strategy but also highlighting potential debt sustainability risks. The full report is available 👉 Download