The International Monetary Fund (IMF) has projected that Ethiopia’s economy will grow by 7.2 percent during 2025. According to its regional economic outlook released on Thursday, October 16, 2025, the IMF stated that Ethiopia will continue to rank among the fastest-growing economies in sub-Saharan Africa.

Despite facing significant challenges—including unsustainable debt levels, volatile commodity prices, and declining foreign aid—Ethiopia has managed to sustain its economic momentum. The IMF attributes this resilience to the country’s macroeconomic adjustment measures and ongoing structural reforms.

The report places Ethiopia alongside Benin, Côte d’Ivoire, Rwanda, and Uganda as key contributors to the region’s economic resilience. It highlights that rising prices of major exports such as coffee and gold have helped Ethiopia mitigate the impact of reduced aid and global trade disruptions.

However, the IMF warns that diminishing development assistance could constrain government revenues and expose Ethiopia to heightened financial and external risks. The report identifies Ethiopia as one of ten African nations where aid, as a percentage of government revenue, is expected to decline significantly by 2025—potentially increasing pressure on social and development expenditures.

To maintain growth and macroeconomic stability, the IMF recommends that Ethiopia enhance domestic revenue generation and strengthen debt management practices.

While sub-Saharan Africa is forecasted to grow by 4.1 percent in 2025, Ethiopia’s projected 7.2 percent growth stands out as one of the highest in the region, signaling continued economic potential despite global uncertainties.

Meanwhile, economic analysts report that Ethiopia is grappling with deepening economic inequality. They argue that political power translated into exclusive economic privileges. The inclusive prosperity promised in 2018 has evolved into a system that enriches a select few while marginalizing millions.

In a separate assessment, the World Bank released its Poverty and Equity Report last month, predicting that Ethiopia’s poverty rate will rise to 43 percent by 2025. The report suggests that the country is backsliding after two decades of economic progress.

The World Bank attributes this regression to a combination of internal and external factors, including the COVID-19 pandemic, the Tigray war, severe drought, slowing GDP growth, and persistent inflation. It notes that inflation has disproportionately affected urban populations, while rural households have largely failed to benefit from rising food prices due to limited market access.

Under the Prosperity Party, economic inequality has reportedly become a mechanism of governance rather than a consequence of crisis. Fiscal authority, government contracts, and investment opportunities have been concentrated among those loyal to the ruling elite. “The centralization of wealth serves political survival,” said one economic analyst. “Prosperity now supports the few, while poverty functions as punishment—a deliberate form of control.”

World Bank data illustrates how this political economy manifests in daily life. Rural Ethiopia, home to three-quarters of the population, remains constrained by stagnant productivity and limited market access. The report notes that rural communities face restricted access to non-agricultural employment due to policies that hinder the efficient operation of land and labor markets.

In 2021, 86 percent of rural adults had not completed primary education, and half of rural families had at least one child with a developmental disability. The disparity in access to essential services is stark: the top 20 percent of the population enjoys three to four times greater access to sanitation and electricity than the bottom 20 percent. Less than 1 percent of the poorest households own a refrigerator, car, bicycle, or computer.