In its 56th regular session held today, the Council of Ministers unanimously approved a historic 2.34 trillion Birr draft federal government budget for the upcoming 2026/2027 FY. The Council has referred this unanimously approved draft budget proclamation to the House of Peoples’ Representatives for a final decision.
The newly proposed budget significantly increases the government’s spending requirements, showing an increase of nearly 400 billion Birr (about 21.2 percent) compared to the 1.93 trillion Birr budget approved and implemented for the current 2025/26 fiscal year.
According to a statement issued by the Council, the draft budget for the 2019 fiscal year was prepared based on the recently approved Medium-Term (2019-2023) Macroeconomic and Fiscal Framework. The government stated that this framework is based on the structural achievements gained from the comprehensive macroeconomic reforms currently being implemented, which are stabilizing the economy and strengthening its foundation.
This multi-trillion Birr budget will be specifically allocated to the four main spending sectors of the federal government: regular expenditures, capital expenditures, subsidies to regional governments, and support for the implementation of Sustainable Development Goals (SDGs).
The Council noted that the spending requirements of executive institutions were carefully evaluated against their missions, responsibilities, and project execution capacities. Furthermore, the budget is directly linked to the goals and directions of the 2019-2021 Development and Investment Plan, which is part of the country’s Ten-Year Perspective Development Plan.
Before deliberating on the draft budget proclamation, the Council held an extensive discussion on the Medium-Term Macroeconomic and Fiscal Framework and approved it unanimously. After thoroughly discussing the budget allocation and incorporating valuable inputs raised by its members, the Council of Ministers unanimously decided to forward the 2026/27 Federal Government Draft Budget Proclamation to the House of Peoples’ Representatives.
