The International Monetary Fund (IMF) has announced that it is rephasing the disbursement schedule for its ongoing support under the Extended Credit Facility (ECF). Originally set at 7.5 percent, the support will now increase to nearly 14 percent of the approved $3.4 billion, effective July 2024.
In its fifth review report, published midweek, the IMF disclosed that it has submitted $468 million for final approval by its Executive Board. These funds represent continued support for the macroeconomic reform program that Ethiopia initiated in the previous budget year.
During her latest press briefing, Julie Kozack, Director of the IMF’s Communications Department, explained that the rephasing of disbursements will bring forward $200 million under the program to help Ethiopia address the immediate economic impact of the war in the Middle East and the Persian Gulf. It is worth recalling that the IMF previously noted that the regional conflict has affected Ethiopia in key areas, including strategic commodity imports such as fuel, as well as significant volumes of exports and remittances.
In the fifth review, published on Wednesday, June 3, the IMF commended the economic reform program that the Ethiopian government has been implementing since last budget year. The IMF said the authorities continue to make progress in advancing their Homegrown Economic Reform Agenda, achieving favorable macroeconomic outcomes up until the onset of the Middle East conflict.
“Output indicators, exports, reserves, and government revenue all continued to improve through early 2026, alongside a decline in inflation. The war in the Middle East was a significant external shock that disrupted trade, causing temporary fuel shortages and sharp increases in the prices of imported fuel and fertilizer. Even so, economic activity appears robust, with only modest impacts so far on output growth and consumer price inflation,” said Álvaro Piris, who led the IMF team that stayed in Ethiopia from May 6 to 20.
However, the Fund appears to have adjusted its previous stance on lifting the credit cap. Piris noted that maintaining strong policy implementation will be essential to consolidate macroeconomic stability.
“A tight monetary policy stance remains warranted to anchor inflation expectations. Further efforts to enhance the functioning and transparency of the foreign exchange market will be important to support external adjustment,” he added.
