IMF Mission Preserves Ambiguity on Ethiopia's Macroeconomic Standing for Second Consecutive Year


IMF Mission Preserves Ambiguity on Ethiopia's Macroeconomic Standing for Second Consecutive Year

In a persisting aura of indecision, the International Monetary Fund (IMF) maintains its opacity about macroeconomic performance and impending financial support to Ethiopia for the second successive year. Questions around the nature, extent, and preconditions of IMF's support remain unanswered, sustaining an air of scepticism about international financial support to Ethiopia. The IMF mission, led by Alvaro Piris, visited Addis Abeba between September 25 to October 3, 2023. Central Bank Governor Mamo Mehiretu and Finance Minister Ahmed Shedie met the IMF team this week at the annual World Bank and IMF joint meetings in Marrakech, signalling a continued yet cautious engagement with Ethiopian authorities. The IMF team said it recognises Ethiopia's "notable strides towards economic stabilisation," attributing its statement to efforts in taming inflation and stabilising the fiscal and monetary policies. However, Piris and his team's sentiment is evident in withholding a firm commitment to immediate financial backing. In a statement issued today, Piris acknowledged the economic reforms undertaken by the Ethiopian authorities, particularly highlighting the "significant fiscal and monetary tightening," which he said laid "a solid groundwork for the success of Ethiopia’s Homegrown Economic Reform Agenda." "The mission made good progress in discussing how the IMF could support the authorities’ economic program," said Piris, pointing towards a positive dialogue yet stopping short of revealing any conclusive deal for the aid and reforms Ethiopian authorities tabled. Despite this, the reserved undertones of the discussions cast a familiar shadow of ambiguity that surrounded last year's meetings, leaving observers in a lurch about IMF's support for Ethiopia. Macroeconomic pundits note that inflationary pressure, social unrest, political instability, security challenges and the lingering impact of the civil war have besieged Ethiopia’s economic trajectory. However, Ethiopia trails into yet another year of fiscal ambiguity, wherein its leaders` attempts to secure international financial support to propel their economic reform agenda forward have been met with cautious, non-committal interactions from the IMF.


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