Ethiopia has risen to become Africa’s fifth-largest economy and Sub-Saharan Africa’s third-largest after a sweeping statistical overhaul increased its measured output by nearly sixty percent, challenging South Africa’s economic standing on the continent.
Ethiopia’s GDP for the 2024–25 period reached $201.4 billion, marking a 59% jump from previous calculations. By the fiscal year that ended in July 2026, the economy expanded further to $210.7 billion.
The previous base year of 2015–16 no longer captured structural transformations across the country, according to Fitsum Assefa, the Finance Minister. The updated metrics incorporate findings from a recent agriculture census, integrated household surveys, and administrative records. For the first time, the national accounts also include data from federal and regional state-owned enterprises as well as non-profit institutions serving households.
Services Sector Generates Largest Share of Economy
The revised data reveals a changing domestic market. The services sector now generates the largest share of the economy at nearly 36%, driven heavily by transport and the operations of state-backed Ethiopian Airlines. Agriculture follows closely at 32%, while industry accounts for 30% of total output.
At a high-level national forum organised by the Ministry of National Strategy, Ethiopia today launched its rebased GDP series, with 2017 EFY (2024/25) as the new base year. While Ethiopia has published official GDP figures since 1960, the previous series, based on 2008 EFY… pic.twitter.com/nfjExQ2ZTU
This statistical reset alters how international observers view the nation’s financial obligations. Oxford Economics noted in a research note that the larger economic denominator mechanically reduces Ethiopia’s debt-to-GDP ratios. This adjustment could improve headline debt sustainability indicators while the government continues restructuring its loans under the G20 Common Framework.
Alexander Venter, an economist at Oxford Economics, pointed out that outstanding debt, servicing costs, and foreign-currency financing requirements remain entirely unchanged despite the larger GDP figure.
| Economic Indicator | Previous Estimate | Revised Base Year (2024/25) | Latest Fiscal Year (2025/26) |
|---|---|---|---|
| Total GDP (USD) | Not comparable | $201.4 billion | $210.7 billion |
| Projected Annual Growth | Varies | 10.2% | 10.2% |
Authorities Introduce Freely Floating Currency
Authorities introduced a freely floating currency two years ago as part of an economic reform program backed by the International Monetary Fund. Ethiopia projects economic growth to reach 10.2% in the current fiscal year.
These policy shifts aim to attract foreign direct investment by opening previously restricted sectors, including telecommunications and banking, to international participants. While the rebasing provides internationally comparable statistics to strengthen the confidence of rating agencies and development partners, the core financial challenges of servicing foreign debt remain central to the nation’s economic trajectory.
