Ethiopia’s estimated gross domestic product has increased by 59.21 per cent following a statistical rebasing exercise, but economists warn that the revision should not be interpreted as a sudden expansion in economic activity or an improvement in living standards.
The revised national accounts put GDP for the 2024/25 fiscal year at 24.03 trillion birr, equivalent to US$201.42 billion, compared with the previous estimate of 15.09 trillion birr, or US$126.5 billion, according to figures presented by Minister of Strategic Affairs Bereket Fessahatsion.
At the unveiling of the revised accounts, Minister of Finance Fitsum Assefa said GDP reached 31.86 trillion birr, or US$210.7 billion, in 2025/26. She said the figures placed Ethiopia fifth among African economies and third in sub-Saharan Africa.
The rebasing exercise, conducted between September 2025 and September 2026, updates the framework used to measure economic output, capturing changes in the economy’s structure and activities previously underrepresented or excluded from national accounts.
Economists interviewed by Capital said the revised figures could improve policymaking but cautioned against confusing a higher estimate of economic size with newly generated wealth.
Tewodros Mekonnen, associate country director of the International Growth Centre, said the increase largely reflected the inclusion of activities that had not been fully recorded under the previous system.
He said new information from agricultural and enterprise censuses, alongside other studies, had helped improve the measurement of output.
“The 59 per cent is a change in the methodology, not a growth,” Tewodros said.
He added that the updated accounts could support better-informed decisions on taxation, public expenditure and economic planning by providing a clearer picture of the sectors contributing to national output.
Bereket said the previous GDP base year had remained unchanged for many years despite economic reforms and the emergence of new activities in digital finance, telecommunications, construction, manufacturing and agriculture.
He cited mobile financial services such as Telebirr, the establishment of a capital market, industrial parks, urban infrastructure, irrigation and increased wheat production among developments inadequately captured by the previous framework.
Under the revised estimates, services account for 35.91 per cent of GDP, followed by agriculture at 31.57 per cent and industry at 30.20 per cent.
Industry’s share increased by 2.43 percentage points compared with the previous estimates. The updated framework also identifies telecommunications and information as a separate economic activity.
London-based economist Abdulmenan Mohammed (PhD) said revising the measurement of GDP did not, in itself, change households’ economic circumstances.
“The way the GDP is measured neither makes Ethiopia wealthier nor benefits citizens,” he told Capital.
Abdulmenan said the larger GDP estimate could significantly reduce the country’s reported debt-to-GDP ratio. However, he did not expect it to meaningfully change ongoing debt restructuring negotiations, noting that creditors also consider indicators such as export performance.
He warned that the revision could reveal a lower tax-to-GDP ratio, potentially encouraging the government to broaden taxation and intensify revenue collection.
Such measures, he cautioned, could place further pressure on businesses and individuals already facing difficult economic conditions.
For statistical improvements to be accompanied by better living standards, employment and sustainable growth, Abdulmenan called for a more supportive environment for private investment, stronger public services and action against corruption.
He also emphasised the need to address insecurity and macroeconomic imbalances, particularly inflation.
Fitsum said the revised accounts would support development planning, fiscal and monetary policymaking, debt sustainability analysis and domestic revenue mobilisation.
She urged government institutions, development partners and private businesses to incorporate the updated figures into their planning and investment decisions.
According to the officials, Ethiopian professionals carried out the exercise in accordance with the international System of National Accounts 2008, with technical support from the International Monetary Fund.
The economists’ central distinction was between measuring existing activity more accurately and generating additional output: the revised accounts may provide a stronger basis for policy, but improvements in household welfare require changes beyond the statistical framework.
