Ethiopia has become Africa’s fifth-largest economy after a major statistical overhaul lifted its measured gross domestic product (GDP) to $210.7 billion for the 2025/26 fiscal year, placing it among the continent’s leading economic powers alongside South Africa, Egypt, Nigeria and Algeria.The rebasing exercise, which replaced the 2015/16 base year with 2024/25, increased Ethiopia’s measured economic output by 59.2 per cent, taking GDP for the new base year to 24.03 trillion birr, equivalent to $201.4 billion, with the following fiscal year’s GDP put at $210.7 billion. The revision incorporates data from state-owned enterprises, non-profits, and new sectors like digital finance, with the government saying the old base year no longer captured the economy’s structural transformation, sectoral expansion and emerging activities such as digital finance and services.
The 59.2 per cent increase represents a statistical revision of the economy’s measured size rather than equivalent growth in actual economic output, with the revised estimates drawing on recent national agriculture and economic establishment censuses, an integrated household survey and administrative records. For the first time, the calculations also incorporate data from federal and regional state-owned enterprises and non-profit institutions serving households, with the new data series providing a more comprehensive picture of the economy’s structure. The revised figures put output at 31.86 trillion birr in 2025/26, with the services sector, which includes transport and contributions from Africa’s biggest carrier Ethiopian Airlines, accounting for the largest share of the economy at almost 36 per cent, followed by agriculture at 32 per cent and industry at 30 per cent. The rebasing will increase Ethiopia’s nominal GDP and lower its debt-to-GDP and tax-to-GDP ratios, according to the government presentation, while boosting its ranking among Africa’s biggest economies.
Ethiopia’s new data will mechanically reduce Ethiopia’s debt-to-GDP metrics, potentially improving headline debt sustainability indicators as the government continues restructuring its loans under the G20 Common Framework, with Oxford Economics noting the implications in a research note. The rebasing will increase Ethiopia’s nominal GDP and lower its debt-to-GDP and tax-to-GDP ratios, according to the presentation, with the country approaching the end of a years-long external debt overhaul and holders of its $1 billion Eurobond having approved a preliminary restructuring agreement in August.
The new $210.7 billion figure places Ethiopia ahead of Morocco, Angola and Kenya in the continental ranking, with the country now the third-largest in sub-Saharan Africa behind Nigeria and South Africa, though comparisons across countries should account for differences in fiscal and calendar-year reporting periods. The Ministry’s report does not provide a fully reconciled comparison with the latest international estimates or establish a revised ranking for Ethiopia among African economies, with such comparisons depending on the adoption and harmonisation of the new national accounts by international statistical institutions.
The rebasing exercise, which began in January 2026 and was completed in September, drew on agricultural and economic establishment censuses, household surveys and administrative records, with National Strategy Minister Bereket Fesehatsion saying at the launch that rebasing would now be repeated every five years. The change reshapes Ethiopia’s position in continental economic comparisons, with the government saying the older methodology no longer adequately captured changes in the economy, including the expansion of sectors and emerging activities such as digital finance and services.
The challenge now is to ensure that the improved data translates into better policy decisions, more accurate debt sustainability analysis and stronger investor confidence, with the rebasing providing a more accurate picture of the economy’s size and structure but not changing the underlying realities of debt, inflation or growth.
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