Ethiopia is projected to achieve real gross domestic product growth of 9.2 percent in 2026, making it one of Africa's strongest performers, according to the African Business Chamber's Ethiopia Economic Outlook for the third quarter of 2026. The expansion is expected to be supported by agriculture, mining and electricity generation. However, the same report forecasts average consumer inflation of 11.8 percent, warning that headline growth will not automatically improve household purchasing power or business profitability.
The AfBC identified several structural constraints on business expansion. Ethiopia's merchandise imports reached about 16.77 billion US dollars in 2024 against exports of only 3.65 billion dollars, according to World Trade Organization data cited in the report. Coffee accounted for roughly 48 percent of reported merchandise exports by value, exposing the country to commodity-price swings. China supplied about 32.6 percent of Ethiopia's merchandise imports in 2024, while the European Union was the largest destination for Ethiopian exports, taking about 28 percent. The report credited Ethiopia's Homegrown Economic Reform Agenda with reshaping the business environment through foreign-exchange and monetary reforms, fiscal measures, financial-sector liberalisation and efforts to improve external debt sustainability, but warned that imported fuel and fertiliser costs, debt-service obligations and security risks remained material uncertainties.
Foreign direct investment inflows rose from 3.3 billion dollars in 2023 to 4.0 billion dollars in 2024, according to UNCTAD's COMESA Investment Report 2025. However, the value of announced greenfield projects fell sharply, from three billion dollars to 801 million dollars, while the number of projects declined from 12 to seven. The AfBC stressed that investors should distinguish between investment inflows, new project announcements and completed productive capacity, and recommended validating demand, financing, counterparties and foreign-currency arrangements before committing capital.
The United Kingdom remains an established commercial partner. UK-Ethiopia trade in goods and services reached 808 million pounds in the four quarters to the second quarter of 2025, with UK exports accounting for 497 million pounds and imports from Ethiopia 311 million pounds, according to the UK Department for Business and Trade. Ethiopia's eligibility for the UK's Developing Countries Trading Scheme may offer tariff advantages, although the AfBC stressed that benefits depend on product-specific rules of origin, certification, labelling and customs requirements.
The AfBC identified agribusiness and food processing, renewable energy, industrial machinery and maintenance, cold-chain and logistics, healthcare supplies, digital and financial technology, and selected mining-related services as priority areas for commercial investigation. It advised foreign firms to begin with pilots, verified buyers and staged payment structures rather than large upfront investments. Looking to 2026-2029, the report's base case expects continued strong growth if reforms proceed and agricultural and electricity output remain supportive, though downside risks include renewed inflation, security disruption, external shocks or reform delays.