Government Expenditure: Ethiopia

Analysis# Ethiopia Government Expenditure Ethiopia's government expenditure stands at 12.582% of GDP in 2026, representing a substantial decline from its 2004 peak of 23.149%. The country has reduced public spending by 45.6% relative to its economy over the past two decades, dropping to an all-time low of 9.538% in 2024. This downward trajectory reflects a consistent pattern of fiscal consolidation across most of the period, though with notable volatility. A sharp contraction occurred between 2017 and 2024, when expenditure fell from 17.987% to 9.538% of GDP. This seven-year period captures significant budget discipline, likely driven by macroeconomic pressures and IMF-backed reform programs. However, 2025 and 2026 show modest upward movement to 12.007% and 12.582% respectively, suggesting a stabilization phase after years of aggressive spending cuts.