World Bank cuts Ethiopia GDP forecast to 6.3% for 2020 fiscal year

Workers sew clothes inside the Indochine Apparel PLC textile factory in Hawassa Industrial Park in Southern Nations, Nationalities and Peoples region, Ethiopia November 17, 2017. REUTERS/Tiksa Negeri

ADDIS ABABA (Reuters) – The World Bank has cut Ethiopia’s economic growth forecast to 6.3% for the 2020 fiscal year, down from an earlier estimate of 9.0%, citing the growing debt burden of state-owned firms and a worsening security situation.

Ethiopia’s central bank earlier this week forecast the economy would expand by 10.8% in its 2019/20 fiscal year that ends in July, up from 9% in the previous year.

Prime Minister Abiy Ahmed, who came to power in 2018, has started ambitious economic reforms aimed at opening up one of Africa’s fastest-growing but most closed economies.

The government says the first sector to be liberalised will be telecoms.

It plans to issue two telecoms licences to multinational mobile companies this year, ending a state monopoly. It has also pledged to gradually liberalise its exchange rate.

Ethnic violence in Ethiopia has displaced more than 2.7 million people over the past two years.

Reporting by Dawit Endeshaw; Writing by George Obulutsa; Editing by Maggie Fick and Alison Williams

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