Ethiopia’s Dollar-Denominated GDP Fell After Birr Float, EU Update Says
An EU economic update says Ethiopia’s nominal GDP measured in US dollars fell from nearly $160 billion in 2023 to $109.1 billion in 2025, largely reflecting the birr’s depreciation rather than a contraction in real output.
In short
- An EU economic update says Ethiopia’s nominal GDP measured in US dollars fell from nearly $160 billion in 2023 to $109.1 billion in 2025, largely reflecting the birr’s depreciation rather than a contraction in real output.
Ethiopia’s nominal gross domestic product measured in US dollars fell by about $50 billion after the country moved to a market-based foreign-exchange regime, according to an economic update cited by The Reporter on August 15, 2026.
The European Union Delegation’s Ethiopia Economic and Trade Update for February–June 2026 put nominal GDP at $109.1 billion in 2025, down from nearly $160 billion in 2023. The change reflects the conversion of domestic output into dollars after the birr depreciated sharply; it does not mean Ethiopia’s inflation-adjusted economy shrank by the same amount.
The update said Ethiopia could return to its 2023 dollar-denominated GDP level by 2028. It also noted that Kenya, with an estimated nominal GDP of $136.5 billion, had temporarily moved ahead of Ethiopia and was expected to retain that position until 2028.
Inflation remained a concern. Headline inflation rose from 9.4 percent in March 2026 to 11.7 percent in April, with food inflation reaching 13.5 percent year on year. The report said this made the National Bank of Ethiopia’s roughly 10 percent inflation objective for the fiscal year ending in July 2026 difficult to achieve.
The update nevertheless described continued real growth and stronger exports. It said exports exceeded $5.2 billion in 2025, up 17 percent, while also warning that debt service was absorbing 43 percent of recurrent government expenditure and constraining public investment.
