Ethiopia revises growth forecast downward

Ethiopia can not maintain the spectacular growth rate of over 10% per year for a decade and claimed is content with 8.5% for the year 2015-2016, Prime Minister Hailemariam Desalegn has announced.

“This growth is good and has been verified by the International Monetary Fund (IMF),” said Desalegn, in a speech to parliament Tuesday and released Wednesday. The Ethiopian fiscal year begins in June and ends on 7 July.

Ethiopian authorities had initially projected a growth of 11% for 2015-2016, but these forecasts have been revised downwards due to drought this year, attributed to El Niño.

The second most populated country in Africa, Ethiopia is a predominantly agricultural state highly dependent on rainfall. This year’s drought is the most severe in 30 years and more than ten million Ethiopians now depend on food aid, according to the UN.

Desalegn had warned Parliament in March that Ethiopia’s growth would be affected and would range “between 7% and 10%” for this fiscal year.

The World Bank had projected in 2015 a growth rate of 9.6% in Ethiopia and anticipated it to decline to 7% in 2016 due to drought but the IMF is even more severe, predicting growth will not exceed 4.5% in 2016.