Deteriorating Macro Outlook

Our outlook for Ethiopia's macroeconomy in 2009 has deteriorated on the back of a significant revision to our global assumptions. BMI now sees global growth of just 0.3% in 2009, with a 2% contraction forecast for the US economy. This bodes ill for Ethiopia's export markets, with coffee and horticulture earnings likely to suffer. We are forecasting the current account deficit swelling to equal 9.8% of GDP in 2009, from an estimated 5.8% of GDP in 2008. The sizeable shortfall weighs on Ethiopia's short- and long-term economic risk ratings.

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