Ethiopia to remain East Africa’s fastest growing economy in 2018

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According to a World Bank report, the Ethiopian economy will maintain its growth lead for the East African region. The economy, however, dropped a step in growth forecast in the Sub-Saharan Africa (SSA) region, falling behind Ghana. In June 2017, the WB forecast Ethiopia as the most expansive in SSA pegging growth at 8.3%. The latest forecast puts Ethiopia at a percentage point behind Ghana. The West African nation is forecast to grow at 8.3% as against Ethiopia’s 8.2%.

Among East African countries, Ethiopia is likely to remain the fastest growing economy, but growth is expected to soften as it takes measures to stabilize government debt. Other 2018 forecasts for the East African region’s economic giants are Kenya (5.5%), Tanzania (6.8%), Uganda (5.1%) and Rwanda (5.9%). Ethiopia beat Kenya last year to become economic giant of the region according to the IMF.

The WB’s Global Economic Prospects report released on January 10, 2018, said there was a modest recovery underway in Sub-Saharan Africa buoyed by an improvement in commodity prices.

Under the area of outlook, the report said regional growth was projected at 3.2% for this year up to an average of 3.6% in 2019 – 2020. It hinted at a solid performance for non-resource-intensive countries hinging it to public investment growth. “Non-resource-intensive countries are projected to expand at a solid pace, helped by robust public investment growth. Economic activity is expected to remain solid in WAEMU, with Ivory Coast and Senegal expanding at a rapid pace,” the report added.

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