Experts at the World Bank predict the Ethiopian economy will expand by 7.2 percent in 2025/6, attributing their forecast for a “still-robust” growth to improved agricultural productivity, electricity production, and gold prices.
A report published by the organization this week praises the country’s IMF-backed economic reforms for easing “longstanding structural constraints.”
However, it warns that Ethiopia remains in debt distress, with elevated sovereign spreads amid ongoing debt restructuring negotiations with bondholders. The World Bank’s forecast is also noticeably lower than the nine percent GDP growth target put forward by the government in October.
The 2026 Global Economy Prospect report also highlights a positive trend in Sub-Saharan Africa. The World Bank expects growth in the region to pick up to four percent this year, 0.3 percentage points higher than its previous prediction in June.
The report states that, in Sub-Saharan Africa, “economic activity benefited from moderating inflation, while higher-than-expected commodity prices, particularly for gold, other precious metals, and coffee, boosted fiscal revenues in several countries.”
Despite this, the World Bank notes that individual economic performances in the region varied widely.
“Most notably, growth diverged among the region’s three largest economies— firming in Nigeria and South Africa but moderating in Ethiopia. Overall, high-frequency survey data indicate that regional economic activity in the second half of 2025 continued to expand,” reads the report.
It also notes the effects of the trade wars and geopolitical shifts of the past year.
The outlook for global trade continues to be dampened by elevated trade tensions and policy uncertainty associated with higher tariffs. After global trade growth was propped up last year by the front-loading of goods trade ahead of tariff increases, it is projected to decelerate markedly in 2026, as stockpiling fades and the impact of tariff measures builds,” reads the report.
