Growth: Strong, But No Longer In The Double Digits

Although 2009 data are currently unavailable, we believe that economic growth in Ethiopia slowed sharply last year as a result of the deterioration in export earnings, worker remittances and foreign investment. Going forward, we project an acceleration in growth to 8.6% in 2010 on the back of higher global soft commodity prices (particularly coffee). Notably though, this will not be a return to the 11% outturns seen in recent years. We also caution that weaker than expected demand in the eurozone (a major export destination), coupled with the general volatility of coffee prices pose downside risks to our medium-term growth projections.

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