Second Ethiopia Economic Update : Laying the Foundation for Achieving Middle Income Status
Over the past decade, Ethiopia has achieved high economic growth, averaging 10.7 percent per year. In 2012, Ethiopia was the 12th fastest growing economy in the World. If the country can continue its historically impressive growth performance, it c...
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| Format: | Economic Updates and Modeling |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://hdl.handle.net/10986/16740 |
| Summary: | Over the past decade, Ethiopia has
achieved high economic growth, averaging 10.7 percent per
year. In 2012, Ethiopia was the 12th fastest growing economy
in the World. If the country can continue its historically
impressive growth performance, it could potentially reach
middle income status by 2025. This, in turn, may require an
adjustment in economic policy to phase in the private sector
as an additional engine of growth. Moreover, Ethiopia needs
to make progress on two related important fronts: enhancing
domestic savings, and, resolving the bottlenecks of the
trade logistics system. This Second Ethiopia economic
update, prepared in collaboration with the Government of
Ethiopia, offers policy guidance on how to move forward.
Chapter one discusses Ethiopia's growth strategy, which
emphasizes a strong expansion of public investment. This
model has delivered impressive results, although the
underlying macro policy mix highlights important challenges
going forward suggesting that an adjustment to strategy may
be warranted. One policy challenge relates to raising
sufficient domestic savings to finance one of the highest
public investment rates in the world, as discussed in
chapter two. Another challenge relates to strengthening the
competitiveness of the economy, to boost the lagging export
performance, and attract foreign direct investment.
Ethiopia's trade logistics system is a key constraint
in this regard, as highlighted in chapter three. |
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