
Fortune News | May 11,2019
Parliament unanimously passed the federal government’s current fiscal budget last Monday, July 8, 2019. Totalling 386.9 billion Birr, it is 11.5pc higher than last year’s budget. The government plans to cover 65pc of it from domestic tax revenues, while external assistance and loans will cover the rest.
In the parliamentary session, Prime Minster Abiy Ahmed (PhD), while answering questions from members of parliament, indicated that the macroeconomic policy the country has been following for the last 15 years would be changing from the ‘aggregate demand’ to ‘aggregate supply’ model.
However, the just passed budget does not seem to strictly reflect that shift as the ‘aggregate supply’ model discourages heavy government spending. The budget has allocated 130.7 billion Br for capital spending, which is a 14.8pc, or 16.4 billion Br, increase from the last fiscal year. Recurrent government spending has gone up by 19.5 Br to 109.5 billion Br.
This shows the dilemma the government is facing. The impressive economic growth of the last 15 years was primarily government driven and necessarily fueled by debt. The country is currently carrying a foreign debt of 27 billion dollars and local debt of 731 billion Br. Since this trend is unsustainable, the government is trying to change its policy and encourage more private sector participation in the economy. However, the private sector in Ethiopia is not strong enough yet to fill the gap. Solving this dilemma will be testing the government’s economic leadership capacity in the coming year.
You can read the full story here
PUBLISHED ON
Jul 13,2019 [ VOL
20 , NO
1002]
Fortune News | May 11,2019
Fortune News | Apr 25,2020
Editorial | Jul 13,2020
Fortune News | Jul 12,2021
Radar | May 31,2020
November 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
November 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
October 16 , 2021 . By HAWI DADHI
Residing in a country with no capital market, an organised marketplace for trading se...
August 28 , 2021 . By HAWI DADHI
The streets of Addis Abeba are as varied as they are many, although too many of them have yet to be named. From the narrow alleyways of the...
May 21 , 2022
There was a great deal of handshaking and patting each other on the back at the Hyatt...
May 14 , 2022
Diana Yohannes is one of those actively engaging in social media platforms with her T...
May 7 , 2022
The Ethiopian Economic Association (EEA) recently proposed the formation of a macroec...
April 30 , 2022
There is no ambiguity in the UNDP's assessment of Ethiopia’s economic performance a...
Put your comments here