Editing Economy of Ethiopia

{{Short description|none}}
{{Use dmy dates|date=September 2020}}
{{Use American English|date=January 2017}}
{{Infobox economy
| image = Abenezer shewag addis 001.jpg
| image_size = 310px
| country = Ethiopia
| caption = [[Addis Ababa]], the financial centre of Ethiopia
| currency = [[Ethiopian birr|Birr]] (ETB, ብር)
| year = 8 July – 7 July
| organs = [[African Union|AU]], [[African Continental Free Trade Agreement|AfCFTA]], [[BRICS]], [[Common Market for Eastern and Southern Africa|COMESA]], [[Intergovernmental Authority on Development|IGAD]], [[World Trade Organization|WTO]] (observer), [[Group of 24|G24]]
| group = {{plainlist|
*[[Developing country|Developing/Emerging]]<ref>{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weoselco.aspx?g=2200&sg=All+countries+%2f+Emerging+market+and+developing+economies |title=World Economic Outlook Database, April 2019 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=29 September 2019}}</ref>
*[[Developing Countries|middle-income economy]]<ref>{{cite web |url=https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups |title=World Bank Country and Lending Groups |publisher=[[World Bank]] |website=datahelpdesk.worldbank.org |access-date=29 September 2019}}</ref>}}
| gdp = {{plainlist|
*{{Increase}} $120. 913billion (nominal, 2025 est.)<ref name="IMFWEOET">{{cite web |url=https://www.imf.org/en/Publications/WEO/weo-database/2024/October/weo-report?c=644,&s=NGDPD,PPPGDP,NGDPDPC,PPPPC,&sy=2022&ey=2029&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 | title=World Economic Outlook Database, October 2024 | publisher=International Monetary Fund |website=IMF.org |access-date=23 October 2024}}</ref>
*{{Increase}} $471.11 billion ([[Purchasing power parity|PPP]], 2025 est.)<ref name="IMFWEOET" />}}
| gdp rank = {{plainlist|
*[[List of countries by GDP (nominal)|60th (nominal, 2024)]]
*[[List of countries by GDP (PPP)|55th (PPP, 2024)]]}}
| growth = {{plainlist|
*6.4%&nbsp;(2022) 7.2%&nbsp;(2023)
*6.1%&nbsp;(2024) 6.5%&nbsp;(2025)<ref>{{Cite web |title=Report for Selected Countries and Subjects |url=https://www.imf.org/en/Publications/WEO/weo-database/2023/April/weo-report |access-date=2024-01-01 |website=IMF |language=en}}</ref>}}
| per capita = {{plainlist|
*{{Increase}} $1,108.11 (nominal, 2025 est.)<ref name="IMFWEOET" />
*{{increase}} $4,320 (PPP, 2025 est.)<ref name="IMFWEOET"/>}}
| per capita rank = {{plainlist|
*[[List of countries by GDP (nominal) per capita|162nd (nominal, 2024)]]
*[[List of countries by GDP (PPP) per capita|161st (PPP, 2024)]]}}
| components = 
| sectors = {{plainlist|
*[[Primary sector of the economy|Agriculture]]: 35.5%
*[[Secondary sector of the economy|Industry]]: 23.11%
*[[Tertiary sector of the economy|Services]]: 36.81% 
*(2020 est.)<ref name="Statista">{{cite web|url=https://www.statista.com/statistics/455149/share-of-economic-sectors-in-the-gdp-of-ethiopia/ |title=Ethiopia: Share of economic sectors in the gross domestic product (GDP) from 2010 to 2020 |access-date=15 February 2022}}</ref>}}
| inflation = {{decreasePositive}}34.8% (2022 est.)<ref>{{cite web|url=https://www.bnnbloomberg.ca/ethiopia-s-inflation-rate-drops-for-first-time-in-four-months-1.1790382.amp.html|title=Ethiopia's Inflation Rate Drops For First Time in Four Months|publisher=[[Bloomberg L.P.|Bloomberg]]|website=bnnbloomberg.ca|access-date=11 July 2022|archive-date=25 March 2023|archive-url=https://web.archive.org/web/20230325184349/https://www.bnnbloomberg.ca/ethiopia-s-inflation-rate-drops-for-first-time-in-four-months-1.1790382.amp.html|url-status=dead}}</ref>
| poverty = {{plainlist|
*{{decreasePositive}} 20% (2019, [[World Bank]])<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.NAHC?locations=ET |title=Poverty headcount ratio at national poverty lines (% of population)|publisher=[[World Bank]]|website=data.worldbank.org |access-date=11 February 2019}}</ref>
*32.6% on less than $1.90/day (2015)<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.DDAY?locations=ET&name_desc=false |title=Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) - Ethiopia |publisher=[[World Bank]] |website=data.worldbank.org |access-date=5 December 2019}}</ref>}}
| gini = {{plainlist|
*35.0 {{color|darkorange|medium}} (2015, [[World Bank]])<ref>{{cite web |url=https://data.worldbank.org/indicator/SI.POV.GINI?locations=ET|title=GINI index (World Bank estimate)|publisher=[[World Bank]]|website=data.worldbank.org |access-date=29 September 2020}}</ref>
*33.6 (2015)<ref>{{Cite book|url=http://hdr.undp.org/sites/default/files/2015_human_development_report.pdf |series=Human Development Report|date=2015|title=Work for human development|last=Selima.|first=Jāhāna|publisher=United Nations Development Programme|isbn=9789211263985|oclc=936070939}}</ref>}}
| hdi = {{plainlist|
*{{increase}} 0.498 {{color|red|low}} (2022)<ref>{{cite web |url=https://www.ena.et/en/?p=38324 |title=UN Pledges Support to Improve Ethiopia's Human Development|website=www.ena.net |access-date=13 September 2022}}</ref>
*0.337 {{color|red|low}} [[List of countries by inequality-adjusted HDI|IHDI]] (2018)<ref>{{cite web |url=http://hdr.undp.org/en/content/table-3-inequality-adjusted-human-development-index-ihdi |title=Inequality-adjusted Human Development Index (IHDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=11 December 2019}}</ref>}}
| cpi = {{decrease}} 37 out of 100 points (2023, [[Corruption Perceptions Index|98th rank]])
| edbr = {{steady}} [[Ease of doing business index#Ranking|159th (below average, 2020)]]<ref>{{Cite web|url=http://www.doingbusiness.org/data/exploreeconomies/ethiopia|title=Doing Business in Ethiopia - World Bank Group|website=www.doingbusiness.org|access-date=10 January 2017|archive-url=https://archive.today/20170111010122/http://www.doingbusiness.org/data/exploreeconomies/ethiopia|archive-date=11 January 2017|url-status=live}}</ref>
| labor = {{plainlist|
*{{increase}} 61,664,369 (2023)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=ET&name_desc=false |title=Labor force, total - Ethiopia |publisher=[[World Bank]] |website=data.worldbank.org |access-date=29 July 2023}}</ref>
*{{increase}} 78% employment rate (2023)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.EMP.TOTL.SP.ZS?locations=ET&name_desc=false |title=Employment to population ratio, 15+, total (%) (modeled ILO estimate) |publisher=[[World Bank]] |website=data.worldbank.org |access-date=29 July 2023}}</ref>}}
| occupations = {{plainlist|
*[[Primary sector of the economy|agriculture]]: 72.7%
*[[Secondary sector of the economy|industry]]: 7.4%
*[[Tertiary sector of the economy|services]]: 19.9%
*(2013 est.)<ref name="CIAWFET">{{cite web|url=https://www.cia.gov/the-world-factbook/countries/ethiopia/ |title=The World Factbook |publisher=[[Central Intelligence Agency]] |website=CIA.gov |access-date=11 February 2019}}</ref>}}
| unemployment = {{Steady}} 3.5% (2022)<ref>{{cite web |url=https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=ET |title=Unemployment, total (% of total labor force) (modeled ILO estimate) |publisher=[[World Bank]] |website=data.worldbank.org |access-date=29 July 2023}}</ref>
| industries = [[food processing]], [[beverage industry|beverages]], [[textile industry|textiles]], [[leather production processes|leather]], [[Chemical industry|chemicals]], [[mineral processing|metals processing]], [[cement#Cement industry in the world|cement]]
| exports = {{increase}} $10.79 billion (2023 est.)<ref>{{cite web |url=https://data.worldbank.org/indicator/NE.EXP.GNFS.CD?locations=ET|title=Exports of goods and services(current US$)-Ethiopia |publisher=[[World Bank]] |website=data.worldbank.org}}</ref>
| export-goods = [[coffee]], [[khat|qat]], [[gold]], [[leather]] products, live [[animal]]s, [[oilseeds]]
| export-partners = {{hlist|United Arab Emirates 17.1%|United States 13.2%|Germany 6.47%|Saudi Arabia 6.33% |Somalia 6.25%|Netherlands 5.22%|China 4.13%|Japan 3.53% |South Korea 2.90%|France 2.73% (2022)<ref name="OECexport">{{cite web |title=Export Partners of Ethiopia |url=https://oec.world/en/visualize/tree_map/hs92/export/eth/show/all/2019/ |publisher=[[The Observatory of Economic Complexity]] |access-date=21 June 2021}}</ref>}}
| imports = {{increase}} $22.91 billion (2023 est.)<ref>{{cite web |url=https://data.worldbank.org/indicator/NE.IMP.GNFS.CD?locations=ET|title=Imports of goods and services(current US$)-Ethiopia|publisher=[[World Bank]] |website=data.worldbank.org}}</ref>
| import-goods = [[Machinery]] and [[aircraft]], [[metal]] and metal products, [[Semiconductor|electrical materials]], [[petroleum product]]s, [[motor vehicle]]s, [[Chemical substance|chemicals]] and [[fertilizer]]s
| import-partners = {{hlist|China 24%|United States 9.11%|India 8.17%|United Arab Emirates 6.27%|United Kingdom 4.44% |Egypt 4.18%|Saudi Arabia 3.96% (2019)<ref name="OECimport">{{cite web |title=Import Partners of Ethiopia |url=https://oec.world/en/visualize/tree_map/hs92/import/eth/show/all/2019/ |publisher=[[The Observatory of Economic Complexity]] |access-date=21 June 2021}}</ref>}}
| current account = {{increase}} −$15.2 billion (2.77% of GDP, 2022 est.)
| gross external debt = {{increaseNegative}} $52.21 billion (2022 est.)<ref>{{cite web|url=https://www.statista.com/statistics/531575/national-debt-of-ethiopia/|title=Ethiopia: National debt from 2017 to 2027|website=statista.com|access-date=2 December 2022}}</ref>
| FDI = {{increasePositive}} $31.6 billion (2022 est.)
            Inflows: $2.43 billion (2021-22 est.)
| debt = {{decreasePositive}} 43.93% of GDP (2022 est.)<ref name="IMFWEOET"/>
| revenue = {{increasePositive}} $26.18billion (2022.est)
| expenses = {{increasePositive}}$26.8 billion (2022 est.)
| balance = 
| aid = $308 million (recipient) ({{As of|2001|alt=2001}})
| credit = [[Standard & Poor's]]:<ref>{{cite web|url=https://www.capitaliq.com/CIQDotNet/CreditResearch/RenderArticle.aspx?articleId=1894456&SctArtId=433731&from=CM&nsl_code=LIME&sourceObjectId=10199471&sourceRevId=1&fee_ind=N&exp_date=20270804-21:15:37|archive-url=https://archive.today/20180411125258/https://www.capitaliq.com/CIQDotNet/CreditResearch/RenderArticle.aspx?articleId=1894456&SctArtId=433731&from=CM&nsl_code=LIME&sourceObjectId=10199471&sourceRevId=1&fee_ind=N&exp_date=20270804-21:15:37|url-status=dead|archive-date=11 April 2018|title=S&P Global Market Intelligence|website=www.capitaliq.com|access-date=16 April 2018}}</ref><br />B (Foreign currency ratings)<br />B (Local currency ratings)<br />B (T&C assessment),<br /> [[Moody's]]:<ref>{{cite web|url=https://www.moodys.com/research/Moodys-Ethiopias-credit-profile-balances-high-growth-and-low-debt--PR_370677|title=Moody's: Ethiopia's credit profile balances high growth and low debt costs against range of challenges|date=1 August 2017|website=moodys.com|access-date=16 April 2018}}</ref><br />B1 (Outlook stable)<br />[[Fitch Ratings|Fitch]]:<ref>{{cite web|url=https://www.fitchratings.com/site/pr/1024834|title=Press Release|website=www.fitchratings.com|access-date=16 April 2018}}</ref><br />B (Outlook stable)
| reserves = {{increase}} $5.9 billion (FY 2024 est.)<ref>https://www.ethiopianreporter.com/135961/</ref>
| cianame = ethiopia
| spelling = 
| deficit = -2.3% of GDP({{As of|2015|alt=2015}})
}}
The '''economy of Ethiopia'''  is a [[Mixed economy|mixed]] and [[transition economy]] with a large public sector. The [[government of Ethiopia]] is in the process of [[Privatization|privatizing]] many of the [[State ownership|state-owned]] businesses and moving toward a [[market economy]].<ref>{{Cite news|url=http://afkinsider.com/136888/ethiopia-moves-toward-privatization-its-not-about-money-its-about-tech-pm-says/|title=Ethiopia Moves Toward Privatization. It's Not about Money. It's About Tech.|last=Sanchez|first=Dana|date=2017-01-10|newspaper=AFKInsider|language=en-US|archive-url=https://archive.today/20170112015334/http://afkinsider.com/136888/ethiopia-moves-toward-privatization-its-not-about-money-its-about-tech-pm-says/|archive-date=12 January 2017|url-status=live|access-date=2017-01-12}}</ref> The banking, [[Telecommunications in Ethiopia|telecommunication]] and [[Transport in Ethiopia|transportation]] sectors of the economy are dominated by [[List of government-owned companies of Ethiopia|government-owned]] companies.<ref>{{Cite news|url=https://www.reuters.com/article/us-ethiopia-telecoms-idUSKBN0MH0KC20150321|title=Ethiopia launches 4G mobile service in the capital|last=Maasho|first=Aaron|date=21 March 2015|newspaper=Reuters|archive-url=https://archive.today/20170112021448/http://www.reuters.com/article/us-ethiopia-telecoms-idUSKBN0MH0KC20150321|archive-date=12 January 2017|url-status=live|access-date=11 January 2017}}</ref><ref>{{Cite news|url=https://www.reuters.com/article/ethiopia-privatisation-idUSL6E8ET53G20120329|title=Ethiopia sells off seven state firms, to offer more|last=Maasho|first=Aaron|date=29 March 2015|newspaper=Reuters|archive-url=https://archive.today/20170112020836/http://www.reuters.com/article/ethiopia-privatisation-idUSL6E8ET53G20120329|archive-date=12 January 2017|url-status=live|access-date=11 January 2017}}</ref>

[[Ethiopia]] has one of the fastest-growing economies in the world and is Africa's second most populous country.<ref name="IFC">{{cite news | title = Private Sector Boosts Ethiopia's Growth | work = [[International Finance Corporation|IFC]] | url = http://www1.ifc.org/wps/wcm/connect/region__ext_content/regions/sub-saharan+africa/news/ethiopia_to_host_world_economic_forum| access-date=27 December 2012}}</ref> Many properties owned by the government during the previous [[regime]] have now been [[Privatization|privatized]] or are in the process of privatization and the liberalization of its financial sector in the near future.<ref name="Reuters">{{cite news | title = Ethiopia sells off seven state firms, to offer more | work = [[Reuters]] | date = 19 March 2012| url = https://www.reuters.com/article/ethiopia-privatisation-idUSL6E8ET53G20120329| access-date=27 December 2012}}</ref> However, certain sectors such as [[Communications in Ethiopia|telecommunications]], [[Finance|financial]] and insurance services, air and [[land transport]]ation services, and retail, are considered to be strategic sectors and are expected to remain under state control for the foreseeable future.

Almost 50% of Ethiopia's population is under the age of 18. Even though education enrollment at primary and tertiary level has increased significantly, [[job creation]] has not caught up with the increased number of secondary and postsecondary educational graduates. The country must create hundreds of thousands of jobs every year just to keep up with [[population growth]].<ref>{{Cite news|url=https://www.economist.com/node/10062658|title=A brittle Western ally in the Horn of Africa|date=1 November 2007|newspaper=The Economist|issn=0013-0613|archive-url=https://archive.today/20170111075210/http://www.economist.com/node/10062658|archive-date=11 January 2017|url-status=live|access-date=11 January 2017}}</ref> 

In 2023, Ethiopia reached an estimated GDP of 156.1 billion nominal dollars and an estimated PPP of 393.85 billion dollars. This mostly comes from a services-based economy with agriculture. In the latest data from 2019 Ethiopia's top trading partners globally included [[China]], the [[United States]], [[United Arab Emirates|UAE]], [[France]], the [[United Kingdom]], [[South Korea]], [[Saudi Arabia]], [[Germany]], [[Japan]], [[Switzerland]], the [[Netherlands]], [[Belgium]], [[Turkey]], [[India]], and [[Egypt]].<ref>{{Cite web |title=International Monetary Fund |url=https://www.imf.org/en/Publications/WEO/weo-database/2022/October/weo-report?c=644,&s=NGDPD,PPPGDP,NGDPRPPPPC,NGDPDPC,PPPPC,LP,&sy=2020&ey=2027&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |website=IMF.org}}</ref><ref>{{Cite news |title=Import partners of Ethiopia |work=[[The Observatory of Economic Complexity]] |url=https://oec.world/en/visualize/tree_map/hs92/import/eth/show/all/2019/}}</ref> In 2021, agriculture made up 37.5% of the country's economic output, while services 36.25% and industry made up 21.85% of the economy.<ref>{{Cite news |title=Ethiopia: Share of economic sectors in the gross domestic product (GDP) from 2011 to 2021 |work=[[Statista]] |url=https://www.statista.com/statistics/455149/share-of-economic-sectors-in-the-gdp-in-ethiopia/#:~:text=This%20statistic%20shows%20the%20share%20of%20economic%20sectors,and%20the%20services%20sector%20contributed%20about%2036.81%20percent.}}</ref> Ethiopia's economy is ranked 159th place out of 190 countries in 'Ease of doing business'.<ref>{{Cite news |title=Ease of doing business score in Ethiopia from 2015 to 2020 |work=[[Statista]] |url=https://www.statista.com/statistics/1257237/ease-of-doing-business-score-in-ethiopia/#:~:text=Ethiopia%20scored%2048%20points%20in,business%20environment%20in%20the%20country.}}</ref> Ethiopia is also a part of [[African Continental Free Trade Area]], [[Common Market for Eastern and Southern Africa]], [[Intergovernmental Authority on Development]], and the [[Group of 24|G24]], and has observer status at the [[World Trade Organization]]. Ethiopia joined the [[BRICS]] economic alliance in January 2024.<ref>{{Cite news |title=How Egypt and Ethiopia joining Brics could help boost China's influence in Africa |work=[[South China Morning Post]] |url=https://www.scmp.com/news/china/diplomacy/article/3233984/how-egypt-and-ethiopia-joining-brics-could-help-boost-chinas-influence-africa}}</ref>

While Ethiopia does not currently have a stock exchange, it did have one in the past during the reign of [[Haile Selassie|Emperor Haile Selassie I]], called an 'ākisīyoni gebeya.' It now has a commodity exchange in Addis Ababa called the [[Ethiopia Commodity Exchange]], established in 2008.<ref>{{Cite news |title=Ethiopia's Commodity Exchange Opens its Doors |work=IFPRI |url=https://www.ifpri.org/news-release/ethiopias-commodity-exchange-opens-its-doors}}</ref>

The Ethiopian economy has a large [[External debt|foreign debt]], with an overall external debt of 28 billion US dollars. [[China]] owns over 13 billion dollars of its debt. Its debt to GDP ratio is smaller than similar and neighboring countries. Ethiopia currently has 2.4 billion dollars of foreign reserves, representing a decline compared to previous years.<ref>{{Cite news |title=IMF Pins Ethiopia Funding Program on Debt-Restructuring Progress |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2023-08-04/imf-pins-ethiopia-funding-program-on-debt-restructuring-progress#xj4y7vzkg}}</ref>

Ethiopia expects to reach a national [[Middle income country|middle-income]] status by 2025.<ref>{{Cite news |title=Working paper series - Ethiopia 2030: A Country Transformed? Options for A Next Generation of Reforms |work=[[United Nations]] |url=https://www.undp.org/ethiopia/publications/working-paper-series-ethiopia-2030-country-transformed-options-next-generation-reforms#:~:text=February%2013%2C%202023&text=The%20United%20Nations%20still%20classifies,middle%20income%20status%20by%202025.}}</ref> Despite this, based on the most recent data from 2019, 68.7% of the population continues to be affected by [[Multidimensional Poverty Index|multidimensional poverty]] and an additional 18.4% vulnerable to it.<ref name=":2">{{Cite web |date=2023 |title=Multidimensional Poverty Index 2023: Ethiopia |url=https://hdr.undp.org/sites/default/files/Country-Profiles/MPI/ETH.pdf |access-date=21 December 2024 |website=United Nations Development Programme}}</ref>

== History ==

{{Main|Economic history of Ethiopia}}

[[File:GDP per capita development of Ethiopia.svg|thumb|Development of GDP per capita]]
Ethiopia's resources have enabled the country—unlike most [[sub-Saharan Africa]]n countries—to maintain contacts with the outside world for centuries.<ref name=":0">{{citation-attribution|1={{cite encyclopedia|title=Ethiopia: a country study|publisher=[[Federal Research Division]], [[Library of Congress]]|location=Washington, D.C.|url=https://www.loc.gov/item/92000507/|last=Wubneh|first=Mulatu|date=1993|editor-last=Ofcansky|editor-first=Thomas P.|edition=4th|pages=146–150|isbn=0-8444-0739-9|oclc=25869403|editor-last2=Berry|editor-first2=LaVerle|entry=The Economy}}}}</ref> Since ancient times, Ethiopian traders exchanged gold, [[ivory]], [[musk]], and wild animal skins for salt and luxury goods, such as silk and velvet.<ref name=":0" /> By the late nineteenth century, coffee had become one of Ethiopia's more important cash crops.<ref name=":0" /> At that time, most trade flowed along two major [[trade route]]s, both of which terminated in the far southwest in the Kefa-Jima region.<ref name=":0" /> From there, one route went north to Mitsiwa via [[Gondar|Gonder]] and Adwa, the other along the [[Awash River]] valley to [[Harar|Harer]] and then on to [[Berbera]] or [[Zeila]] on the [[Red Sea]].<ref name=":0" />

Ethiopia lost its status as a great trading state after the fall of [[Axum]].<ref name=":0" /> Most Ethiopians came to despise traders, preferring instead to emulate the country's legendary warriors and priests.<ref name=":0" /> After establishing a foothold in the country, Greek, [[Armenians|Armenian]], and Arab traders became the economic intermediaries between Ethiopia and the outside world.<ref name=":0" /> Arabs also settled in the interior and eventually dominated all commercial activity except petty trade.<ref name=":0" />

When their occupation of Ethiopia ended in 1941, the Italians left behind them a country whose economic structure was much as it had been for centuries.<ref name=":0" /> There had been some improvements in [[communication]]s, particularly in the area of road building, and attempts had been made to establish a few small industries and to introduce [[commercial farming]], particularly in Eritrea, which Italy had occupied since 1890.<ref name=":0" /> But these changes were limited.<ref name=":0" /> With only a small proportion of the population participating in the monetized economy, trade consisted mostly of barter.<ref name=":0" /> [[Wage labour|Wage labor]] was limited, economic units were largely self-sufficient, [[foreign trade]] was negligible, and the market for manufactured goods was extremely small.<ref name=":0" />

During the late 1940s and 1950s, much of the economy remained unchanged.<ref name=":0" /> The government focused its development efforts on expansion of the [[Bureaucracy|bureaucratic]] structure and ancillary services.<ref name=":0" /> Most farmers cultivated small plots of land or herded cattle.<ref name=":0" /> Traditional and primitive farming methods provided the population with a [[Subsistence economy|subsistence standard of living]].<ref name=":0" /> In addition, many [[Nomad|nomadic peoples]] raised livestock and moved seasonally in drier areas.<ref name=":0" /> The agricultural sector grew slightly, and the [[Industrial sector in Ethiopia|industrial sector]] represented a small part of the total economy.<ref name=":0" />

By the early 1950s, [[Haile Selassie|Emperor Haile Selassie I]] (reigned 1930–74) had renewed calls for a transition from a subsistence economy to an agro-industrial economy.<ref name=":0" /> To accomplish this task, Ethiopia needed infrastructure to develop resources, a material base to improve living conditions, and better health, education, communications, and other services.<ref name=":0" /> A key element of the emperor's new economic policy was the adoption of centrally administered [[Urban planning|development plans]].<ref name=":0" />

The First Five-Year Plan (1957–1961) sought to develop strong infrastructure, particularly in transportation, construction, and communications, to link isolated regions.<ref name=":0" /> The Second Five-Year Plan (1962–1967) signaled the start of a 20-year program to change Ethiopia's predominantly agricultural economy to an agro-industrial one.<ref name=":0" /> The Third Five-Year Plan (1968–1973) also sought to facilitate Ethiopia's economic well-being by raising [[manufacturing]] and agro-industrial performance.<ref name=":0" /> However, unlike its predecessors, the third plan expressed the government's willingness to expand educational opportunities and to improve peasant agriculture.<ref name=":0" />

During the First Five-Year Plan, the [[gross national product]] (GNP) increased at a 3.2 percent annual rate as opposed to the projected figure of 3.7 percent, and growth in economic sectors such as agriculture, manufacturing, and mining failed to meet the national plan's targets.<ref name=":0" /> The Planning Commission never assessed the performance of the Second Five-Year Plan and Third Five-Year Plan, largely because of a shortage of qualified personnel.<ref name=":0" /> However, according to data from the Ethiopian government's Central Statistical Authority, during the 1960/61 to 1973/74 period the economy achieved sustained [[economic growth]].<ref name=":0" /> Between 1960 and 1970, Ethiopia enjoyed an annual 4.4 percent average growth rate in per capita gross domestic product (GDP).<ref name=":0" /> Relative to its neighbors, Ethiopia's economic performance was mixed.<ref name=":0" />

By the early 1970s, Ethiopia's economy not only had started to grow but also had begun to diversify into areas such as manufacturing and services.<ref name=":0" /> However, these changes failed to improve the lives of most Ethiopians.<ref name=":0" /> About four-fifths of the population were subsistence farmers who lived in poverty because they used most of their meager production to pay taxes, rents, debt payments, and bribes.<ref name=":0" />

The [[Ethiopian Civil War|1974 revolution]] resulted in the [[nationalization]] and restructuring of the Ethiopian economy.<ref name=":0" /> After the revolution, the country's economy can be viewed as having gone through four phases.<ref name=":0" /> Internal political upheaval, armed conflict, and radical [[institutional reform]] marked the 1974-78 period of the revolution.<ref name=":0" /> There was little economic growth; instead, the government's nationalization measures and the highly unstable [[political climate]] caused economic dislocation in sectors such as agriculture and manufacturing.<ref name=":0" /> As a result of these problems, GDP increased at an average annual rate of only 0.4 percent.<ref name=":0" />

In the second phase (1978–1980), the economy began to recover as the government consolidated power and implemented institutional reforms.<ref name=":0" /> More important, security conditions improved as internal and external threats subsided.<ref name=":0" /> GDP grew at an average annual rate of 5.7 percent.<ref name=":0" />

In the third phase (1980–1985), the economy experienced a setback.<ref name=":0" /> Except for Ethiopian [[fiscal year]] (EFY) 1982/83, the growth of GDP declined.<ref name=":0" /> Manufacturing took a downturn as well, and agriculture reached a crisis stage, particularly due to drought that lead to widespread [[famine]].<ref name=":0" />

In the fourth period (1985–1990), the economy continued to stagnate.<ref name=":0" /> GDP and the manufacturing sector also grew during this period, GDP increasing at an average annual rate of 5 percent.<ref name=":0" /> However, the lingering effects of the 1984-85 drought undercut these achievements and contributed to the economy's overall stag.<ref name=":0" />

Since 1991, the Ethiopian government has embarked on a program of economic reform, including privatization of state enterprises and rationalization of [[government regulation]].<ref>{{Cite book|last1=Seid|first1=Yared|last2=Taffesse|first2=Alemayehu S.|last3=Ali|first3=Seid Nuru|date=8 November 2016|title=Ethiopia—an agrarian economy in transition|url=https://books.google.com/books?id=sNyACwAAQBAJhttps|language=en|publisher=Brookings Institution Press|isbn=9780815729501|oclc=961309230|work=Africa's Lions: Growth Traps and Opportunities for Six African Economies}}{{Dead link|date=March 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> While the process is still ongoing, the reforms have attracted [[foreign direct investment]].

In 2015, Ethiopia has 2,700 millionaires, a number that has more than doubled since 2007. Their fortunes are mainly built-in niches of [[economic rent]]s (banks, mines, etc.) without investing in structural and strategic sectors (industrial production, infrastructure, etc.) and should in no way promote economic development or represent a source of [[competition]] for Western multinationals.<ref>{{Cite web|url=https://www.monde-diplomatique.fr/2017/11/PIOT/58045|title=Rencontre Avec Les pionniers de l'" anticapitalism "|first=Olivier|last=Piot|date=1 November 2017|website=Le Monde diplomatique}}</ref>

The Ethiopian government is stepping up its efforts to attract foreign investors, particularly in the textile sector. They can now import their machines without customs duties, benefit from a [[tax exemption]] for ten years, pay rents much lower than market prices, and use very inexpensive water and electricity. Major brands have established themselves in the country, such as Decathlon, H&M, and Huajian. These companies also benefit from a cheap labor force, with a monthly salary of around 35 euros. Finally, trade agreements between Ethiopia and the European Union allow them to export duty-free.<ref>{{Cite web|url=https://mondediplo.com/2019/04/06ethopia-box|title=Going for textiles|first=Christelle|last=Gérand|date=1 April 2019|website=Le Monde diplomatique}}</ref>

==Sectors==

=== Agriculture, forestry and fishing ===
[[File:Specialty coffee originated from ethiopia.jpg|left|thumb|Coffee sorting process is huge since Ethiopia exports over a billion dollars' worth of coffee globally]]
[[File:Ethiopia econ 1976.jpg|236x236px|thumb|Map of economic activities in Ethiopia and Eritrea (1976)]]
{{See also|Agriculture in Ethiopia|Fishing in Ethiopia|Forestry in Ethiopia|label 1=Agriculture|label 2=Fishing}}

{{As of|2015}}, agriculture accounts for almost 40.5% of GDP, 81 percent of exports, and 85 percent of the [[Workforce|labour force]].<ref name="CIA">{{cite web|title=Ethiopia. CIA The World Fact Book|url=https://www.cia.gov/the-world-factbook/countries/ethiopia/|publisher=CIA Factbook|access-date=10 January 2017}}</ref> Many other economic activities depend on agriculture, including marketing, processing, and export of agricultural products. Production is overwhelmingly of a subsistence nature, and a large part of commodity exports are provided by the small agricultural cash-crop sector. Principal crops include [[coffee production in Ethiopia|coffee]], [[Pulse (legume)|pulse]]s (e.g., beans), [[rapeseed|oilseeds]], [[cereal]]s, potatoes, [[sugarcane]], and vegetables.  Exports are almost entirely agricultural commodities, with [[coffee]] as the largest foreign exchange earner, and its flower industry becoming a new source of revenue: for 2005/2006 (the latest year available) Ethiopia's coffee exports represented 0.9% of the world exports, and [[oilseeds]] and flowers each representing 0.5%.<ref>[http://www.imf.org/external/pubs/cat/longres.cfm?sk=22219.0 "The Federal Democratic Republic of Ethiopia: Selected Issues Series"], International Monetary Fund Country Report No. 08/259, pp. 35f (Retrieved 4 February 2009)</ref> Ethiopia is Africa's second biggest [[maize]] producer.<ref>{{cite news| url=https://www.economist.com/world/africa/displaystory.cfm?story_id=9304411 | newspaper=The Economist| title=Get the gangsters out of the food chain | date=7 June 2007}}</ref> In 2000, Ethiopia's [[livestock]] contributed to 19% of total GDP.<ref>{{cite web|title=Livestock Sector Brief: Ethiopia|url=http://www.fao.org/ag/againfo/resources/en/publications/sector_briefs/lsb_ETH.pdf|work=FAO Country Profiles|publisher=FAO|access-date=7 November 2011|author=Food and Agriculture Organization|author-link=Food and Agriculture Organization|page=1|date=May 2004}}</ref>

{{As of|2008}}, some countries that import most of their food, such as [[Saudi Arabia]], have begun planning the purchase and [[land development|development]] of large tracts of arable land in developing countries such as Ethiopia.<ref name="ft_2008-08-20">{{cite news |title=Arable Land, the new gold rush |first=Javier |last=Blas |author2=Andrew England |url=http://en.afrik.com/article14301.html |newspaper=Financial Times |location=London |date=20 August 2008 |access-date=6 November 2009 |quote=Meles Zenawi, the prime minister of Ethiopia, is also enthusiastic. After welcoming a Saudi agriculture delegation a fortnight ago, he said: 'We told them [the Saudis] that we would be very eager to provide hundreds of thousands of hectares of agricultural land for investment.' |archive-url=https://web.archive.org/web/20090923112001/http://en.afrik.com/article14301.html |archive-date=23 September 2009 |url-status=dead }}</ref> This [[land grabbing]] has raised fears of food being exported to more prosperous countries while the local population faces its own shortage.<ref name="ft_2008-08-20" />

[[Forest product]]s are mainly logs used in construction. The [[Silviculture|silvicutural]] products are used in [[construction]] and [[manufacturing]], and as [[Energy development|energy sources]].<ref>{{Cite journal|last1=Wakjira|first1=Dereje T.|last2=Gole|first2=Tadesse W.|year=2007|title=Customary Forest Tenure in Southwest Ethiopia|journal=Forests, Trees and Livelihoods|volume=17|issue=4|pages=325–338|doi=10.1080/14728028.2007.9752607|s2cid=167720625|issn=1472-8028}}</ref><ref>{{Cite book|title=Silviculture in the Tropics|last1=Lemenih|first1=Mulugeta|last2=Bongers|first2=Frans|chapter=Dry Forests of Ethiopia and Their Silviculture |date=1 January 2011|publisher=Springer Berlin Heidelberg|isbn=9783642199851|editor-last=Günter|editor-first=Sven|series=Tropical Forestry|volume=8|pages=261–272|language=en|doi=10.1007/978-3-642-19986-8_17|editor-last2=Weber|editor-first2=Michael|editor-last3=Stimm|editor-first3=Bernd|editor-last4=Mosandl|editor-first4=Reinhard}}</ref>
Ethiopia's [[Fishery|fisheries]] are entirely [[fresh water]], as it has no marine [[coast]]line. Although total production has been continuously increasing since 2007, the fishing industry is a very small part of the economy. Fishing is predominantly [[Artisanal fishing|artisanal]]. In 2014, nearly 45,000 fishermen were employed in the sector with only 30% of them employed full-time.<ref>{{Cite web|url=http://www.fao.org/fishery/facp/ETH/en|title=Fisheries & Aquaculture - Country Profile|date=1 October 2015|series=Ethiopia|publisher=Food and Agriculture Organization of the United Nations|archive-url=https://archive.today/20170111113716/http://www.fao.org/fishery/facp/ETH/en|archive-date=11 January 2017|url-status=live|access-date=11 January 2017}}</ref>

In 2018, Ethiopia produced the following goods:<ref>{{cite web |title=Ethiopia production in 2018, by FAO |url=http://www.fao.org/faostat/en/#data/QC/}}</ref>

* 7.3 million tons of [[maize]] (17th largest producer in the world)
* 4.9 million tons of [[sorghum]] (4th largest producer in the world)
* 4.2 million tons of [[wheat]] 
* 2.1 million tons of [[barley]] (17th largest producer in the world)
* 1.8 million tons of [[sweet potato]] (5th largest producer in the world)
* 1.4 million tons of [[sugar cane]]
* 1.3 million tons of [[Yam (vegetable)|yam]] (5th largest producer in the world)
* 988 thousand tons of [[broad bean]]
* 982 thousand tons of [[millet]]
* 743 thousand tons of [[potato]]
* 599 thousand tons of [[vegetable]]
* 515 thousand tons of [[chick pea]] (6th largest producer in the world)
* 508 thousand tons of [[banana]]
* 470 thousand tons of [[coffee]] (6th largest producer in the world)
* 446 thousand tons of [[cabbage]]
* 374 thousand tons of [[pea]] (20th largest producer in the world)
* 322 thousand tons of [[onion]]
* 301 thousand tons of [[sesame seed]] (7th largest producer in the world)
* 294 thousand tons of [[bell pepper]]
* 172 thousand tons of [[lentil]] (11th largest producer in the world)
* 144 thousand tons of [[rice]]
* 143 thousand tons of [[peanut]]
* 140 thousand tons of [[cotton]]
* 124 thousand tons of [[garlic]]
* 102 thousand tons of [[mango]] (including [[mangosteen]] and [[guava]])
* 101 thousand tons of [[linseed]] (7th largest producer in the world)

=== Textile industry ===

Employees of Ethiopian [[Textile manufacturing|garment factories]], who work for brands such as [[Guess]], [[H&M]] or [[Calvin Klein]], receive a monthly salary of 26 dollars per month. These very low wages have led to low [[productivity]], frequent strikes and high turnover. Some factories have replaced all their employees on average every 12 months, according to a 2019 report of the Stern Centre for Business and Human Rights at [[New York University]].<ref>{{Cite news|url=https://www.lemonde.fr/afrique/article/2019/05/08/en-ethiopie-les-petites-mains-de-h-m-ou-calvin-klein-gagnent-23-euros-par-mois_5459655_3212.html|title=En Ethiopie, les petites mains de H&M ou Calvin Klein gagnent 23 euros par mois|newspaper=Le Monde.fr|date=8 May 2019|via=Le Monde}}</ref>

===Minerals and mining===
{{excerpt|Mining in Ethiopia}}

===Energy===
{{main|Energy in Ethiopia}}
Waterpower and forests are Ethiopia's main energy sources. The country derives about 90 percent of its electricity needs from [[hydropower]], which means that [[electricity generation]], as with agriculture, is dependent on abundant rainfall. Present installed capacity is rated at about 2000 megawatts, with planned expansion to 10,000 megawatts. In general, Ethiopians rely on forests for nearly all of their energy and construction needs; the result has been [[Ethiopian deforestation|deforestation]] of much of the highlands during the last three decades.<ref name=cp/> Ethiopia has set out plans to invest $40 billion to 71 energy projects by 2030<ref>{{cite web |url=https://reglobal.co/ethiopia-plans-40-billion-investment-in-71-clean-energy-projects/|title=Ethiopia plans $40 billion investment in 71 clean energy projects|date=15 September 2021 |access-date=15 September 2021}}</ref>
[[File:Abiy with Modi for BRICS Summit.jpg|left|thumb|Ethiopian Prime Minister [[Abiy Ahmed|Ahmed]] with Indian counterpart Prime Minister [[Narendra Modi]] meeting for Ethiopia's admission to the alliance ]]
Less than one-half of Ethiopia's towns and cities are connected to the national grid. Petroleum requirements are met via imports of refined products, although some oil is being hauled overland from Sudan. Oil exploration in Ethiopia has been underway for decades, ever since Emperor [[Haile Selassie of Ethiopia|Haile Selassie I]] granted a 50-year concession to [[SOCONY-Vacuum]] in September 1945.<ref>[https://web.archive.org/web/20070504022725/http://www.time.com/time/magazine/article/0,9171,854515,00.html "Sinco Places a Bet"], ''[[Time (magazine)|Time]]'', 17 September 1945 (Retrieved 14 May 2009)</ref>

Recent oil and gas discoveries across [[East Africa]] have seen the region emerge as a new player in the global oil and gas industry. As exciting as the huge gas fields of East Africa are, however, the strong decline in oil prices and expectations for an L-shaped recovery with low prices over the coming years are increasingly challenging the economic viability of the industry in this region.<ref>{{Cite web|title = Is East Africa's gas asset boom about to go bust?|url = http://www.mineweb.com/articles-by-type/independent-viewpoint/is-east-africas-gas-asset-boom-about-to-go-bust/|website = Mineweb|access-date = 18 February 2016|language = en-US|archive-date = 20 October 2015|archive-url = https://web.archive.org/web/20151020141243/http://www.mineweb.com/articles-by-type/independent-viewpoint/is-east-africas-gas-asset-boom-about-to-go-bust/|url-status = dead}}</ref><ref>{{Cite web|title = Africa's exports by region {{!}} Bright Africa|url = http://www.riscura.com/brightafrica/exports-by-region/#gs.SFnDodg|website = www.riscura.com|access-date = 18 February 2016|archive-url = https://web.archive.org/web/20160225100354/http://www.riscura.com/brightafrica/exports-by-region/#gs.SFnDodg|archive-date = 25 February 2016|url-status = dead}}</ref> The reserves are estimated at {{convert|4|Tcuft}}, while exploration for gas and oil is underway in the [[Gambela Region]] bordering [[South Sudan]].<ref name="cp" />
<!-- Deleted image removed: [[File:GERD Dam Image.jpg|thumb|The Grand Renaissance Dam is set to be one of the biggest dams on the globe, and the biggest in Ethiopia. It is set to generate billions of dollars' worth of economic growth, and electricity for 60 million people. ]] -->
The discoveries were expected to drive billions of dollars in annual investment to the region over the next decade.<ref>{{Cite web|title = Oil And Gas Discoveries Near Africa's East Coast To Soon Drive Billions in Investments: PWC|url = http://www.ibtimes.com/oil-gas-discoveries-near-africas-east-coast-soon-drive-billions-investments-pwc-1678534|website = International Business Times|date = 4 September 2014|access-date = 18 February 2016}}</ref> According to BMI estimates, the findings in the last few years are more than that of any other region in the world, and the discoveries are expected to continue for the next few years. However, falling global oil prices are threatening the commercial viability of many of these gas prospects.<ref>{{Cite news|title = Oil Prices: What's Behind the Drop? Simple Economics|url = https://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html|newspaper = The New York Times|date = 16 January 2016|access-date =18 February 2016|issn = 0362-4331|first = Clifford|last = Krauss}}</ref>

===Manufacturing===
{{main|Manufacturing in Ethiopia}}
A program to privatize state-owned enterprises has been underway since the late 1990s.<ref name=cp>[http://lcweb2.loc.gov/frd/cs/profiles/Ethiopia.pdf Ethiopia country profile]. [[Library of Congress]] [[Federal Research Division]] (April 2005). ''This article incorporates text from this source, which is in the [[public domain]].''</ref> There has been a large growth of manufacturing in Ethiopia. Several industrial parks have been built with a focus on textiles.

===Transport===
{{main|Transport in Ethiopia}}
Prior to the outbreak of the 1998–2000 [[Eritrean–Ethiopian War]], landlocked Ethiopia mainly relied on the seaports of [[Asseb]] and [[Massawa]] in [[Eritrea]] for international trade.

{{Multiple image
| image1            = ET-ALP - Boeing 767-360(ER) - Ethiopian Airlines - VGHS.jpg
| caption1          = [[Ethiopian Airlines]] is the largest airline in Africa, and one of the highest grossing airlines in the world with a revenue over 5 billion USD.
| image2            = Ethiopian Commercial Bank Addis Abeba.jpg
| caption2          = The largest bank in Ethiopia, the commercial bank's former headquarters in Addis Ababa, now serving as one of the other head offices.
| total_width       = 340
}}

{{As of|2005}}, Ethiopia uses the ports of [[Djibouti]], connected to [[Addis Ababa]] by the [[Rail transport in Ethiopia|Addis Ababa – Djibouti Railway]], and to a lesser extent [[Port Sudan]] in [[Sudan]].  In May 2005, the Ethiopian government began negotiations to use the port of [[Berbera]] in [[Somaliland]]. 

By 2030, the government expects a $74 billion investment in transportation.<ref>{{cite web|url=https://www.trade.gov/market-intelligence/ethiopia-transport-sector|title=Ethiopia Transport Sector|date=30 June 2022 |agency=International Trade Administration|access-date=30 June 2022}}</ref>

==== Road ====
As of 2016, there are {{Convert|113066|km|mi}} all-weather roads.<ref>{{Cite web|url=https://www.export.gov/article?id=Ethiopia-Road-and-Railways|title=Ethiopia - Road and Railways|date=21 June 2017|website=export.gov|access-date=9 March 2018|archive-date=10 March 2018|archive-url=https://web.archive.org/web/20180310010239/https://www.export.gov/article?id=Ethiopia-Road-and-Railways|url-status=dead}}</ref>

==== Air ====
[[Ethiopian Airlines]] is Africa's largest and most profitable airline.<ref name="Ethiopian Airlines 2015 outlook: more rapid expansion as it becomes Africa’s largest airline">{{cite news|title=Ethiopian Airlines 2015 outlook: more rapid expansion as it becomes Africa's largest airline |work=CAPA Centre for Aviation |date=13 January 2015 |url=http://centreforaviation.com/analysis/ethiopian-airlines-2015-outlook-more-rapid-expansion-as-it-becomes-africas-largest-airline-204559 |url-status=live |archive-url=https://archive.today/20170111040219/https://centreforaviation.com/analysis/ethiopian-airlines-2015-outlook-more-rapid-expansion-as-it-becomes-africas-largest-airline-204559|archive-date=11 January 2017}}</ref> It serves 132 destinations with a fleet of 141 aircraft.

==== Rail ====
The Ethiopian railway network has been rapidly expanding. In 2015, the first light rail in Africa was opening in Addis Ababa. In 2017, the electric [[Addis Ababa–Djibouti Railway|Addis Ababa-Djibouti]] railway began operations. Presently, two other electric railways are under construction: [[Awash–Weldiya Railway|Awash-Woldiya]] and [[Weldiya–Mekelle Railway|Woldiya-Mekelle]].

===Telecommunications and technology===
{{See also|Telecommunications in Ethiopia|Media in Ethiopia|Internet in Ethiopia|label 1=Telecommunications|label 2=Media}}
Telecommunications were historically provided by a state-owned monopoly, Ethio Telecom, formerly the [[Ethiopian Telecommunications Corporation]]. However, on October, 2022, [[Safaricom Telecommunications Ethiopia]] launched its telecommunications services, becoming the first private operator in the country.<ref>Dawit Endeshaw (2022) "Kenya's Safaricom launches network in Ethiopia as first private operator", Reuters, October 6. https://www.reuters.com/business/media-telecom/kenyas-safaricom-launches-network-ethiopia-first-private-operator-2022-10-06/</ref>  

[[File:Ethiopian cargo ship at Port of Djibouti.jpg|thumb|Ethiopian shipment cargo ship, docked in Djibouti]]  

In 2020, ministers set out a national transformation strategy called Digital Ethiopia 2025.<ref>Blavatnik School of Government (2020) "A digital roadmap for the developing world", June 24. https://www.bsg.ox.ac.uk/news/digital-roadmap-developing-world</ref><ref>Eldad Damte (2020) "Digital Strategy Takes Root in Ethiopia", Addis Insight, June 20. https://addisinsight.net/digital-strategy-takes-root-in-ethiopia/</ref> Its aim is to prepare the country for the development of an economy based on digital technology.

===Tourism===
{{main|Tourism in Ethiopia}}
The services sector consists almost entirely of tourism, with additional economic opportunity in wholesale and retail trade, transportation, and communications. Developed in the 1960s, tourism declined greatly during the late 1970s and the 1980s under the military government. Recovery began in the 1990s, but growth has been constrained by the lack of suitable hotels and other infrastructure, the impact of drought, the 1998–2000 [[Eritrean–Ethiopian War|war with Eritrea]], and the specter of terrorism. In 2002 more than 156,000 tourists entered the country, many of them Ethiopians visiting from abroad, spending more than US$77 million.<ref name=cp/> In 2008, the number of tourists entering the country had increased to 330,000.<ref name="UNdata">{{cite web | url=http://data.un.org/CountryProfile.aspx?crName=Ethiopia | title=UNdata country profile: Ethiopia | access-date=15 July 2011}}</ref> A decade later, in 2019, Ethiopia registered a record of 812,000 tourists visiting the country, bringing a revenue of $3.55 bn (4.2 percent of the gross national product).<ref>{{cite web |last1=World data. info |title=Development of the tourism sector in Ethiopia from 1995 to 2020 |url=https://www.worlddata.info/africa/ethiopia/tourism.php |access-date=31 August 2022}}</ref><ref>{{cite web |last1=Project-E |title=Tourism in Ethiopia – Boom and Fall and Rise Again? |url=https://project-e.eu/tourism-in-ethiopia/#:~:text=In%202019%2C%20the%20fact%20that,year%20for%20the%20Ethiopian%20economy. |access-date=31 August 2022 |archive-date=31 August 2022 |archive-url=https://web.archive.org/web/20220831144135/https://project-e.eu/tourism-in-ethiopia/#:~:text=In%202019%2C%20the%20fact%20that,year%20for%20the%20Ethiopian%20economy. |url-status=dead }}</ref>

==Macroeconomic trends==
{|class="wikitable" style="float: right; margin-left: 10px"
! style="text-align:center; background:#cfb;" colspan="2" |Share of world GDP (PPP)<ref>{{cite web |title=World Economic Outlook Database (customised report) |url=https://www.imf.org/en/Publications/WEO/weo-database/2018/October/weo-report?c=644,&s=NGDP_RPCH,&sy=1980&ey=2023&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |website=International Monetary Fund |publisher=IMF |access-date=17 April 2021}}</ref>
|-
! style="background:#cfb;"|Year
! style="background:#cfb;"|Share
|-
|style="text-align:left;"|1980 || style="text-align:right;" |0.08%
|-
|style="text-align:left;"|1990 || style="text-align:right;" |0.07%
|-
|2000
| style="text-align:right;"|0.07%
|-
|2010
| style="text-align:right;"|0.10%
|-
| style="text-align:left;" |2017 || style="text-align:right;" |0.16%
|}
The following table displays the trend of Ethiopia's gross domestic product at market prices, according to estimates by the [[International Monetary Fund]] with figures in millions of Ethiopian Birr.<ref>{{Cite web|url=https://www.imf.org/external/pubs/ft/weo/2017/01/weodata/weorept.aspx?sy=1980&ey=2022&scsm=1&ssd=1&sort=country&ds=.&br=1&c=644&s=NGDP_R,NGDPDPC,PPPEX&grp=0&a=&pr.x=27&pr.y=3|title=Report for Selected Countries and Subjects|website=www.imf.org|language=en-US|access-date=2018-09-13}}</ref>
{| class="wikitable"
|-
! Year || Gross Domestic Product || GDP (USD) || US Dollar 
|-
!      || Birr (millions) || per capita || Exchange
|-
| 1980 || 14,665 || 190 || 2.06 Birr
|-←←←←←←←←←←| 1985 || 19,476 || 220 || 2.06 Birr
|-
| 1990 || 25,011 || 257 || 2.06 Birr
|-
| 1995 || 47,560 || 148 || 5.88 Birr
|-
| 2000 || 64,398 || 124 || 8.15 Birr
|-
| 2005 || 106,473 || 169 || 8.65 Birr
|-
| 2006 || 131,672 || 202 || 8.39 Birr
|-
| 2007 || 171,834 || 253 || 8.93 Birr
|-
| 2008 || 245,973 || 333 || 9.67 Birr
|-
| 2009 || 386,215 || 398|| 12.39 Birr
|-
| 2010 || 427,026 || 361|| 13.33 Birr
|-
|2017
|1,832,786
|823
|
|-
|2020
|3,374,349
|969
|
|-
|2023
|8,499,779
|1,473
|
|}

The current GDP (USD) per capita of Ethiopia shrank by 43% in the 1990s.<ref>{{cite web|url=http://earthtrends.wri.org/text/economics-business/variable-638.html |title=What We Do |access-date=11 June 2015 |url-status=dead |archive-url=https://web.archive.org/web/20090220134324/http://earthtrends.wri.org/text/economics-business/variable-638.html |archive-date=20 February 2009}}</ref> The economy saw continuous real GDP growth of at least 5% since 2004.

The following table shows the main [[economic indicator]]s in 1980–2023. [[Inflation]] below 5% is in green.<ref>{{Cite web |title=Report for Selected Countries and Subjects |url=https://www.imf.org/en/Publications/WEO/weo-database/2023/October/weo-report |access-date=2024-02-26 |website=IMF |language=en}}</ref>
{| class="wikitable" style="text-align:center;"
!Year
!GDP<br /><small>(in bn. US$ PPP)</small>
!GDP per capita<br /><small >(in US$ PPP)</small>
!GDP<br /><small>(in bn. US$ nominal)</small>
!GDP growth<br /><small>(real)</small>
!Inflation rate<br /><small>(in Percent)</small>
!Government debt<br><small>(in % of GDP)</small>
|-
|1980
|10.5
|324
|7.4
|{{increase}}4.0%
|{{increaseNegative}}12.4%
|n/a
|-
|1981
|{{Increase}}11.5
|{{Increase}}346
|{{Increase}}7.6
|n/a
|{{increase}}1.9%
|n/a
|-
|1982
|{{increase}}12.3
|{{increase}}360
|{{Increase}}8.0
|{{increase}}1.0%
|{{increaseNegative}}7.7%
|n/a
|-
|1983
|{{increase}}13.8
|{{increase}}391
|{{Increase}}8.9
|{{increase}}7.8%
|{{increase}}3.6%
|n/a
|-
|1984
|{{Increase}}14.0
|{{decrease}}384
|{{decrease}}8.4
|{{Decrease}}−2.3%
|{{decreasePositive}}−0.3%
|n/a
|-
|1985
|{{decrease}}12.8
|{{decrease}}339
|{{Increase}}9.8
|{{decrease}}−11.4%
|{{increaseNegative}}18.4%
|n/a
|-
|1986
|{{Increase}}14.3
|{{Increase}}368
|{{Increase}}10.2
|{{Increase}}9.7%
|{{increaseNegative}}5.6%
|n/a
|-
|1987
|{{Increase}}16.7
|{{Increase}}416
|{{Increase}}10.9
|{{Increase}}13.9%
|{{decreasePositive}}−9.1%
|n/a
|-
|1988
|{{Increase}}17.4
|{{increase}}419
|{{Increase}}11.3
|{{increase}}0.6%
|{{increase}}2.2%
|n/a
|-
|1989
|{{Increase}}18.0
|{{Increase}}420
|{{Increase}}11.9
|{{decrease}}−0.5%
|{{increaseNegative}}9.6%
|n/a
|-
|1990
|{{Increase}}19.1
|{{Increase}}432
|{{Increase}}12.6
|{{Increase}}2.6%
|{{increaseNegative}}5.2%
|n/a
|-
|1991
|{{decrease}}18.3
|{{decrease}}401
|{{Increase}}13.9
|{{decrease}}−7.2%
|{{increaseNegative}}20.9%
|n/a
|-
|1992
|{{decrease}}17.1
|{{decrease}}361
|{{Increase}}14.7
|{{decrease}}−8.9%
|{{increaseNegative}}21.0%
|75.3%
|-
|1993
|{{Increase}}19.8
|{{increase}}404
|{{decrease}}9.1
|{{increase}}13.4%
|{{increaseNegative}}10.0%
|{{increaseNegative}}120.8%
|-
|1994
|{{Increase}}20.9
|{{Increase}}414
|{{decrease}}8.1
|{{Increase}}3.5%
|{{increase}}1.2%
|{{increaseNegative}}132.9%
|-
|1995
|{{increase}}22.7
|{{increase}}435
|{{decrease}}7.9
|{{increase}}6.1%
|{{increaseNegative}}13.4%
|{{decreasePositive}}125.6%
|-
|1996
|{{Increase}}26.2
|{{Increase}}488
|{{Increase}}8.8
|{{Increase}}13.5%
|{{increase}}0.9%
|{{decreasePositive}}113.8%
|-
|1997
|{{Increase}}27.5
|{{Increase}}496
|{{decrease}}8.6
|{{increase}}2.8%
|{{decreasePositive}}−7.2%
|{{decreasePositive}}68.8%
|-
|1998
|{{decrease}}26.6
|{{decrease}}468
|{{decrease}}7.8
|{{decrease}}−4.2%
|{{increase}}3.6%
|{{increaseNegative}}76.5%
|-
|1999
|{{Increase}}28.7
|{{Increase}}491
|{{decrease}}7.5
|{{Increase}}6.3%
|{{increaseNegative}}7.9%
|{{increaseNegative}}83.8%
|-
|2000
|{{Increase}}32.2
|{{Increase}}537
|{{Increase}}8.2
|{{Increase}}9.8%
|{{increase}}0.7%
|{{decreasePositive}}80.2%
|-
|2001
|{{Increase}}35.4
|{{Increase}}574
|{{decrease}}8.1
|{{increase}}7.4%
|{{decreasePositive}}−8.2%
|{{increaseNegative}}81.9%
|-
|2002
|{{Increase}}36.5
|{{Increase}}578
|{{decrease}}7.8
|{{Increase}}1.6%
|{{increase}}1.7%
|{{increaseNegative}}95.3%
|-
|2003
|{{decrease}}36.4
|{{decrease}}562
|{{Increase}}8.6
|{{decrease}}−2.1%
|{{increaseNegative}}17.8%
|{{decreasePositive}}92.6%
|-
|2004
|{{Increase}}41.8
|{{Increase}}628
|{{Increase}}10.1
|{{Increase}}11.7%
|{{increase}}3.2%
|{{increaseNegative}}96.5%
|-
|2005
|{{Increase}}48.5
|{{increase}}711
|{{Increase}}12.4
|{{Increase}}12.6%
|{{increaseNegative}}11.7%
|{{decreasePositive}}70.1%
|-
|2006
|{{Increase}}55.8
|{{increase}}797
|{{Increase}}15.3
|{{Increase}}11.5%
|{{increaseNegative}}13.6%
|{{decreasePositive}}57.9%
|-
|2007
|{{Increase}}64.1
|{{Increase}}884
|{{Increase}}19.3
|{{Increase}}11.8%
|{{increaseNegative}}17.2%
|{{decreasePositive}}31.4%
|-
|2008
|{{Increase}}72.6
|{{Increase}}969
|{{Increase}}26.3
|{{Increase}}11.2%
|{{increaseNegative}}44.4%
|{{decreasePositive}}27.4%
|-
|2009
|{{increase}}80.4
|{{increase}}1,046
|{{Increase}}28.7
|{{increase}}10.0%
|{{increaseNegative}}8.5%
|{{decreasePositive}}26.0%
|-
|2010
|{{Increase}}90.0
|{{Increase}}1,141
|{{decrease}}26.9
|{{Increase}}10.6%
|{{increaseNegative}}8.1%
|{{increaseNegative}}35.3%
|-
|2011
|{{Increase}}102.3
|{{Increase}}1,267
|{{Increase}}30.5
|{{Increase}}11.4%
|{{increaseNegative}}33.2%
|{{increaseNegative}}39.5%
|-
|2012
|{{Increase}}112.5
|{{increase}}1,361
|{{Increase}}42.2
|{{Increase}}8.7%
|{{increaseNegative}}24.1%
|{{decreasePositive}}34.2%
|-
|2013
|{{Increase}}122.4
|{{Increase}}1,444
|{{Increase}}46.5
|{{Increase}}9.9%
|{{increaseNegative}}8.1%
|{{increaseNegative}}38.5%
|-
|2014
|{{Increase}}148.5
|{{Increase}}1,707
|{{Increase}}54.2
|{{Increase}}10.3%
|{{increaseNegative}}7.4%
|{{increaseNegative}}39.6%
|-
|2015
|{{Increase}}167.1
|{{Increase}}1,876
|{{Increase}}63.1
|{{Increase}}10.4%
|{{increaseNegative}}10.1%
|{{increaseNegative}}45.8%
|-
|2016
|{{increase}}194.7
|{{increase}}2,134
|{{Increase}}72.1
|{{Increase}}8.0%
|{{increaseNegative}}7.3%
|{{increaseNegative}}49.2%
|-
|2017
|{{Increase}}215.1
|{{Increase}}2,303
|{{Increase}}76.8
|{{Increase}}10.2%
|{{increaseNegative}}10.6%
|{{increaseNegative}}51.4%
|-
|2018
|{{Increase}}237.2
|{{Increase}}2,484
|{{Increase}}80.2
|{{Increase}}7.7%
|{{increaseNegative}}13.8%
|{{increaseNegative}}54.7%
|-
|2019
|{{Increase}}263.3
|{{Increase}}2,698
|{{Increase}}92.6
|{{Increase}}9.0%
|{{increaseNegative}}15.8%
|{{increaseNegative}}51.8%
|-
|2020
|{{Increase}}282.9
|{{Increase}}2,838
|{{Increase}}96.6
|{{Increase}}6.1%
|{{increaseNegative}}20.4%
|{{decreasePositive}}50.3%
|-
|2021
|{{Increase}}314.1
|{{Increase}}3,083
|{{Increase}}99.3
|{{Increase}}6.3%
|{{increaseNegative}}26.8%
|{{increaseNegative}}50.5%
|-
|2022
|{{Increase}}357.5
|{{Increase}}3,435
|{{Increase}}120.4
|{{Increase}}6.4%
|{{increaseNegative}}33.9%
|{{decreasePositive}}43.9%
|-
|2023
|{{Increase}}393.3
|{{Increase}}3,719
|{{Increase}}155.8
|{{Increase}}6.1%
|{{increaseNegative}}29.1%
|{{decreasePositive}}36.1%
|}
Ethiopia's economy experienced strong, broad-based growth averaging 9.4% a year from 2010/11 to 2019/20. Ethiopia's real gross domestic product (GDP) growth slowed down to 6.1% in 2019/20 due to the [[COVID-19 pandemic]].<ref name=":02">{{Cite web|title=Overview|url=https://www.worldbank.org/en/country/ethiopia/overview|access-date=2021-10-10|website=World Bank|language=en}}</ref> Industry, mainly construction, and services accounted for most of the growth. Agriculture was not affected by the COVID-19 pandemic and its contribution to growth slightly improved in 2019/20 compared to the previous year. Private consumption and public investment explain demand-side growth, the latter assuming an increasingly important role.<ref name=":02" />

=== Poverty ===
{{Excerpt|Poverty in Ethiopia}}

== External trade ==
[[File:2006Ethiopian exports.PNG|thumb|left|Ethiopian exports in 2006]]
Until 2013, the major agricultural export crop was [[Coffee production in Ethiopia|coffee]], providing about 26.4% of Ethiopia's foreign exchange earnings. In the beginning of 2014, oilseeds exports have been more important.<ref>[http://www.ethiosports.com/2014/06/30/oilseed-overtakes-coffee-as-ethiopias-top-export-earner/ "Oilseed overtakes coffee as Ethiopia's top export earner"] Ethiosports, 2014. (Retrieved 1 July 2014)</ref> Coffee is critical to the Ethiopian economy. More than 15 million people (25% of the population) derive their livelihood from the coffee sector.<ref>[http://www.luxner.com/cgi-bin/view_article.cgi?articleID=279 "Ethiopian coffee: The best in the world?"] African Business, 2001. (Retrieved 24 January 2007)</ref>
<!-- Deleted image removed: [[File:Ethiopia Sea trade ship.jpg|thumb|An Ethiopian trade ship is seen. ]] -->
Other exports include live animals, leather and leather products, chemicals, [[gold]], [[legume|pulses]], oilseeds, flowers, fruits and vegetables and [[khat]] (or ''qat''), a leafy [[shrub]] which has [[Psychoactive drug|psychotropic]] qualities when chewed. Cross-border trade by [[Pastoralism|pastoralists]] is often informal and beyond state control and regulation. In [[East Africa]], over 95% of cross-border trade is through unofficial channels and the unofficial trade of live cattle, camels, sheep and goats from Ethiopia sold to [[Somalia]], [[Kenya]] and [[Djibouti]] generates an estimated total value of between US$250 and US$300 million annually (100 times more than the official figure).<ref name="ODI">Pavanello, Sara 2010. [http://www.odi.org.uk/resources/details.asp?id=4997&title=working-across-borders-harnessing-potential-cross-border-activities-improve-livelihood-security-horn-africa-drylands Working across borders - Harnessing the potential of cross-border activities to improve livelihood security in the Horn of Africa drylands] {{Webarchive|url=https://web.archive.org/web/20101112224025/http://www.odi.org.uk/resources/details.asp?id=4997&title=working-across-borders-harnessing-potential-cross-border-activities-improve-livelihood-security-horn-africa-drylands |date=12 November 2010 }}. London: [[Overseas Development Institute]]</ref> This trade helps lower [[food prices]], increase food security, relieve border tensions and promote [[regional integration]].<ref name="ODI" /> However, there are also risks as the unregulated and undocumented nature of this trade runs risks, such as allowing disease to spread more easily throughout the region. Furthermore, the government of Ethiopia is purportedly unhappy with lost [[tax revenue]] and foreign exchange revenues.<ref name="ODI" /> Recent initiatives have sought to document and regulate this trade.<ref name="ODI" />

Dependent on a few vulnerable crops for its foreign exchange earnings and reliant on imported oil, Ethiopia lacks sufficient foreign exchange. The financially conservative government has taken measures to solve this problem, including stringent [[import controls]] and sharply reduced [[Subsidy|subsidies]] on retail gasoline prices. Nevertheless, the largely subsistence economy is incapable of supporting high military expenditures, drought relief, an ambitious development plan, and indispensable imports such as oil; it therefore depends on [[Foreign aid to Ethiopia|foreign assistance]].

In December 1999, Ethiopia signed a $1.4 [[1000000000 (number)|billion]] joint venture deal with the Malaysian oil company, [[Petronas]], to develop a huge [[natural gas field]] in the [[Somali Region]]. By the year 2010, however, implementation failed to progress and Petronas lost its license to develop the field, which is now being invested in by Chinese company, Poly-GCL Petroleum.<ref>{{Cite web|url=https://newbusinessethiopia.com/oil-gas/ethiopia-to-auction-second-crude-oil-production-site/|title=Ethiopia to auction second crude oil production site – New Business Ethiopia}}</ref>{{Which|date=November 2021}}<ref>[http://www.upstreamonline.com/live/article231616.ece "Petronas sells Ethiopian assets to SouthWest"] Upstream Online news, 6 October 2010. (Retrieved 10 December 2010)</ref> 
Ethiopia has already begun exporting electricity to Kenya, South Sudan and Djibouti. Earning from this has generated US$300 million annually. After the completion of the [[Grand Ethiopian Renaissance Dam]] (GERD) total generation of exports to neighboring countries is expected to bring in US$1 billion annually to the economy.

The dam, which was completed in 2023, is the largest hydroelectric power plant in Africa as well as among the 20 largest in the world.

===Trade statistics===
{| class="wikitable"
!Year
!Goods exports<br /><small>(million US$)</small><ref>{{Cite web |title=Goods exports (BoP, current US$) - Ethiopia |url=https://data.worldbank.org/indicator/BX.GSR.MRCH.CD?end=2023&locations=ET&most_recent_value_desc=true&start=1977 |access-date=2025-01-25 |website=World Bank Open Data}}</ref>
!Goods imports<br /><small>(in</small> <small>million US$)</small><ref>{{Cite web |title=Goods imports (BoP, current US$) - Ethiopia |url=https://data.worldbank.org/indicator/BM.GSR.MRCH.CD?end=2023&locations=ET&most_recent_value_desc=true&start=1977 |access-date=2025-01-25 |website=World Bank Open Data}}</ref>
!Net trade<br /><small>(in</small> <small>million US$)</small><ref>{{Cite web |title=Net trade in goods (BoP, current US$) - Ethiopia |url=https://data.worldbank.org/indicator/BN.GSR.MRCH.CD?end=2023&locations=ET&most_recent_value_desc=true&start=1977 |access-date=2025-01-25 |website=World Bank Open Data}}</ref>
|-
|2023
|{{Increase}}$3,470
|{{Increase}}$15,318
|{{Decrease}}−$11,849
|-
|2020
|{{Increase}}$3,253
|{{Decrease}}$11,762
|{{Decrease}}−$8,509
|-
|2015
|{{Increase}}$2,920
|{{Increase}}$14,977
|{{Decrease}}−$12,057
|-
|2010
|{{Increase}}$2,480
|{{Increase}}$7,365
|{{Decrease}}−$4,885
|-
|2005
|{{Increase}}$917
|{{Increase}}$3,701
|{{Decrease}}−$2,784
|-
|2000
|{{Increase}}$486
|{{Increase}}$1,131
|{{Decrease}}−$645
|-
|1990
|{{Decrease}}$292
|{{Increase}}$912
|{{Decrease}}−$620
|-
|1980
|$419
|$650
|{{Decrease}}−$230
|}
==See also==
{{col div}}
*[[Foreign aid to Ethiopia]]
*[[Famines in Ethiopia]]
*[[Growth and Transformation Plan]]
*[[List of companies of Ethiopia]]
*[[Special economic zone]]
*[[Trade unions in Ethiopia]]
*[[United Nations Economic Commission for Africa]]
{{col div end}}

==References==
{{Reflist}}{{reflist|group=note}}

===Works cited===
* {{cite book |last=Belda |first=Pascal |title=Ebizguide Ethiopia |url=https://books.google.com/books?id=7X6YOGVaJ7QC&pg=PA87 |year=2006 |publisher=MTH Multimedia S.L. |isbn=978-84-607-9667-1}} 
* {{cite book |last1=Ofcansky |first1=Thomas P. |last2=Berry |first2=LaVerle Bennette |title=Ethiopia a Country Study |url=https://books.google.com/books?id=R3M0V0VfgiMC&pg=PA201 |date=1 June 2004 |publisher=Kessinger Publishing |isbn=978-1-4191-1857-9}}

== Further reading ==
* Fantu Cheru, Christopher Cramer, and Arkebe Oqubay (eds.). 2019. ''[https://global.oup.com/academic/product/the-oxford-handbook-of-the-ethiopian-economy-9780198814986 The Oxford Handbook of the Ethiopian Economy]''. Oxford University Press.
*{{Cite book|url=https://books.google.com/books?id=cp-NAgAAQBAJ|title=The Atlas of Economic Complexity: Mapping Paths to Prosperity|last1=Hausmann|first1=Ricardo|last2=Hidalgo|first2=César A.|last3=Bustos|first3=Sebastián|last4=Coscia|first4=Michele|last5=Simoes|first5=Alexander|date=17 January 2014|publisher=MIT Press|isbn=9780262525428|oclc=836557569|language=en}}
* {{Cite report|url=http://documents.worldbank.org/curated/en/463121480932724605/pdf/110730-WP-P155867-PUBLIC-WBEEUdraftforlaunchdecemberfull.pdf|title=Why so idle? Wages and Employment in a Crowded Labor Market|last=World Bank Group|date=2 December 2016|issue=5|access-date=11 January 2017}}

==External links==
* {{usurped|1=[https://web.archive.org/web/20040227023102/http://addisfortune.com/ Addis Fortune, an online economics and finance journal]}}
* [http://www.trademap.org/open_access/Index.aspx?proceed=true&reporter=231 Ethiopia latest trade data on ITC Trade Map]
* [https://web.archive.org/web/20060113165741/http://www.nbe.gov.et/History/history.htm National Bank of Ethiopia: History of banking in Ethiopia]
* [http://wits.worldbank.org/CountryProfile/Country/ETH/Year/2012/Summary World Bank Ethiopia Summary Trade Statistics]
* [https://amgcoffeeexport.com/impact-of-coffee-export-on-economy-in-ethiopia/ Coffee Export Impacts Ethiopia’s Economy]

{{Ethiopia topics}}
{{Economy of Ethiopia}}
{{Africa in topic|Economy of}}

[[Category:Economy of Ethiopia| ]]
[[Category:Economies of developing countries]]
[[Category:African Union member economies|Ethiopia]]