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Fed Tables 1.93T Br Budget Bill During Strong Fiscal Consolidation Push

Jun 10 , 2025

The Federal government has presented a budget bill before Parliament of 1.93 trillion Br for the fiscal year 2025/26. The budget, which federal lawmakers are currently reviewing, includes allocations of 1.2 trillion Br for recurrent spending, 415 billion Br for capital expenditure, 315 billion Br earmarked for transfers to regional states, and an additional 14 billion Br to help regional states achieve the Sustainable Development Goals (SDGs).

According to Finance Minister Ahmed Shide, who delivered the bill to Parliament about 73pc of the planned spending, roughly one trillion Birr, is expected to come from domestic tax revenues. His administration anticipates receiving another 236 billion Br from international development partners, with the rest to be covered by project-related funding.

The proposed budget unveiled a gross fiscal deficit equal to 2.2pc of the GDP, while the net deficit is projected at one percent. To bridge the shortfall, the administration pledged not plan to borrow directly from the Central Bank but instead intends to issue treasury bills (T-bills).

Minister Ahmed stated the government’s commitment to strict fiscal and monetary discipline, which he said is essential to match public spending with national income, control inflation, and ensure efficient use of resources. According to Ahmed, the budget bill confers with the administration's macroeconomic reforms goals and its 10-year growth strategy. It sets an ambitious economic growth target of 8.9pc for the upcoming fiscal year. The IMF forecasted the economy to grow by 6.6pc during the same period.

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