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Ethiopia

Devaluing the birr, Abiy gambles on IMF-backed reforms

The Prime Minister’s claims of an economic miracle clash with the reality of unremitting austerity for tens of millions

After a year of sweeping macro-economic reforms – floating the birr, tightening budgets and adopting an interest-rate-based monetary policy – Prime Minister Abiy Ahmed’s government has secured a third IMF review disbursement and formalised a debt accord with official creditors, amid growing regional insecurity and social schisms at home. The IMF’s latest review under its four-year, US$3.4 billion adjustment programme unlocked $262.3 million and praised gains in inflation, exports, and reserves, while warning that waning donor support and security risks could undermine momentum.

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