The Federal Democratic Republic of Ethiopia: 2025 Article IV Consultation, Third Review Under the Extended Credit Facility Arrangement, and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Direc

In July 2024, the Board approved a four-year arrangement under the Extended Credit Facility to support the authorities’ Homegrown Economic Reform agenda (HGER), which aims to correct macroeconomic imbalances, restore external debt sustainability, and lay the foundations for high, private sector-led growth. The authorities’ policy actions in the first year of the program have yielded strong results. The transition towards a flexible exchange rate regime has proceeded with little disruption. Measures to modernize monetary policy, mobilize domestic revenues, enhance social safety nets, strengthen SOEs, and anchor financial stability continue to show encouraging results. Maintaining reform momentum will be important to consolidate gains and support growth and poverty reduction in the medium term.