Ethiopia’s Perplexing Fiscal Dilemma

 The Ethiopian government has approved a budget of ETB801 billion (USD15 billion) for the 2023-24 fiscal year, which began on July 8. The budget, equivalent to 7.1Pct of anticipated GDP for the year, prioritizes pro-poor sectors such as infrastructure development, education and health but reduces capital expenditure and freezes public sector new recruitment. The Government is seeking USD12 billion in funding based on its 2023-2027 macroeconomic and fiscal frameworks. Critics have raised concerns about debt servicing’s impact on priority spending and the potential hindrance to infrastructure development and job creation from reduced capital expenditure EBR’s Bamlak Fekadu highlights the forecast for the new fiscal year, the budget deficit, inflation, import growth, the allocation of funds for different sectors and regions, and also look into the impact of Direct Advances on the economy.