On April 22, 2016, Standard & Poor’s Ratings Services affirmed its 'B/B' long-and short-term foreign and local currency sovereign credit ratings on the Federal Democratic Republic of Ethiopia. The outlook is stable.

Overview

• In our view, Ethiopia’s external position remains weak, with sizable current account deficits and relatively low levels of Central Bank reserves covering only two months of current account payments in 2016.
• Growth will moderate somewhat owing to the effect of a drought, but we still anticipate that Ethiopia's economic performance will continue to be robust. We forecast real GDP growth averaging over 7% in 2015-2019, ahead of many other sub-Saharan African countries.
• We believe strong economic growth will mitigate some fiscal risks and allow general government debt to stabilize at about 30% of GDP over the next few years.
• We are therefore affirming our 'B/B' ratings on Ethiopia.
• The stable outlook reflects our expectation that economic performance will remain robust and that current account deficits and the accumulation of government debt (including that of state-owned enterprises) will not materially deviate from our forecasts over the next 12 months.