The Federal Democratic Republic of Ethiopia: Fourth Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia

This paper presents Republic of Ethopia’s Fourth Review under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review. The Ethiopian authorities continue to make progress in achieving the objectives of the Fund-supported program, with better-than-anticipated macroeconomic outcomes. Strong growth, exports, revenue mobilization, and reserves accumulation, and declining inflation, show good results from the reforms. Maintaining reform momentum is essential to consolidate gains and support growth and poverty reduction in the medium term. Maintaining a tight monetary stance continues to be appropriate to anchor inflation expectations and support further declines in inflation. The authorities continue to take steps to enhance the functioning of the foreign exchange market. Policy reforms are expected to support robust growth and continued easing of inflation in the medium term. Key downside risks include policy slippages or delays in reform implementation in response to social or political pressures, or a worsening security environment.