Addis Ababa, June 30, 2026 (FMC) – Ethiopia’s proposed federal budget for the 2019 Ethiopian Fiscal Year (2026/27) places strong emphasis on protecting low-income households, sustaining the country’s economic reform agenda, and accelerating inclusive economic growth, Minister of Finance Ahmed Shide told lawmakers on Tuesday.
Presenting the record 2.339 trillion Birr draft federal budget to the House of People’s Representatives, the minister said the spending plan is designed to consolidate the gains of Ethiopia’s Homegrown Economic Reform Program while safeguarding citizens’ purchasing power amid rising living costs.
“The budget has been prepared with special consideration for low-income segments of society and is expected to have a positive impact on the livelihoods of Ethiopian families,” Ahmed told Parliament.
He said the proposed budget includes targeted subsidies for key social expenditures aimed at cushioning vulnerable households and strengthening the country’s social protection system.
According to the minister, the budget also seeks to ease inflationary pressures while addressing longstanding macroeconomic imbalances through prudent fiscal management.
Ahmed noted that the proposed spending plan is aligned with Ethiopia’s Homegrown Economic Reform Agenda and the Ten-Year Development Plan, which he said have enabled the country to maintain economic resilience despite both domestic and global challenges.
He stated that Ethiopia projects its economy to expand by 10.1 percent during the upcoming fiscal year, following an average annual growth rate of 6.8 percent recorded between the 2018/19 and 2023/24 fiscal years and 9.2 percent growth in 2024/25.
The minister added that the economy is expected to register 10.2 percent growth by the end of the current Ethiopian fiscal year, reflecting the continued momentum generated by the government’s comprehensive economic reform measures.
Ahmed stressed that the government’s fiscal policy will continue to strike a balance between promoting economic growth and enhancing social welfare, ensuring that public investment supports both long-term development objectives and the immediate needs of citizens.
Under the proposed budget, more than 1.2 trillion Birr is allocated for recurrent expenditures, 568.2 billion Birr for capital investment, 520.6 billion Birr in transfers to regional states, and 14 billion Birr to support regional Sustainable Development Goal (SDG) initiatives.
More than half of the total budget—52.9 percent—has been allocated to recurrent expenditures, including debt servicing, fertilizer and petroleum subsidies, and the provision of essential public services.
Priority sectors receiving substantial allocations include education, healthcare, social services, energy, infrastructure, agriculture, and industrial development, in line with the government’s strategy to promote broad-based and sustainable economic transformation.
The finance minister also underscored the government’s commitment to strengthening domestic revenue mobilization by expanding the tax base, with the aim of ensuring that public revenues grow in tandem with the economy while reducing long-term fiscal vulnerabilities.
On international cooperation, Ahmed said Ethiopia will continue to deepen engagement with its development partners while preserving its policy independence.
“Our partnerships with international allies will continue to strengthen in the coming years while preserving our country’s policy independence,” he said, adding that Ethiopia will pursue partnerships that contribute to economic stability and improve the well-being of its people.
The record draft budget is expected to support Ethiopia’s efforts to maintain macroeconomic stability, sustain public investment, and advance the country’s long-term economic transformation agenda.