[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111123-en":3,"doc-seo-111123-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111123,549758146520,"Patrick","https://ap-avatar.wpscdn.com/avatar/80002397d8c0411e94?_k=1775819394049821470",8,"Research & Report","The Federal Democratic Republic of Ethiopia - Joint Bank-Fund Debt Sustainability Analysis - Preliminary Risk Assessment","The Federal Democratic Republic of Ethiopia faces heightened political, economic, and humanitarian challenges, with weakened international support during the Tigray conflict and resumed assistance afterward. Debt repayment risks have emerged from clustered debt service payments and adverse developments. Ethiopia’s external debt is assessed as unsustainable, driven by sustained breaches of exports-related external debt indicators and a weak Debt Carrying Capacity. After a missed Eurobond interest payment in December 2023, the country is in debt distress and needs timely reforms and creditor debt relief to restore sustainability.","Public Disclosure Authorized  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Hassan Zaman (IDA) , and Annalisa Fedelino (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA\u003Cbr>JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS1 |  |\n| --- | --- |\n| Risk of external debt distress | In debt distress |\n| Overall risk of debt distress | In debt distress |\n| Granularity in the risk rating | Unsustainable |\n| Application of judgment | No |\n\nEthiopia faces political, economic, and humanitarian challenges. Support from the international community weakened notably during the two-year conflict in Tigray but is now resuming. Bunching of debt service in the near to medium term and adverse developments have led to the realization of debt repayment risks.  \nEthiopia’s debt is assessed to be unsustainable, mainly due to protracted breaches of exports-related external debt indicators and is based on a weak Debt Carrying Capacity (DCC) .2 Following a missed Eurobond interest payment in December 2023, the country is in debt distress. Timely implementation of the authorities’ reform agenda and debt relief from external creditors are required to alleviate liquidity pressures and restore debt sustainability. The authorities have committed to achieving a moderate risk of debt distress rating by the end of the approved ECF arrangement. An Official Creditor Committee under the G20 Common Framework (OCC) was formed in September 2021, and agreed to suspend debt service due in 2023 and 2024 on November 9,2023 .  \n1 This preliminary analysis is based on the Joint Bank-Fund Debt Sustainability Framework for Low-Income Countries (LICDSF) that was approved in 2017.  \n2 The downgrade to “weak” followed two successive weak signals in April and October 2022. The composite indicator based on the October 2024 World Economic Outlook (WEO) and 2023 World Bank Country Policy and Institutional Assessment (CPIA) data that was published in July 2024, is currently estimated at 2.47. Ethiopia’s CPIA has trended down since 2020 and has been important contributor to the decline in the CI score.  \nCreditors provided financing assurances for a debt treatment consistent with the IMF-supported program and agreement with the authorities on a term sheet for debt treatment is on track by the second review. This assessment is based on the assurances provided by the co-chairs by letter to the Ethiopian authorities as well as the OCC meetings held on December 4, which reviewed debt treatment perimeter and the authorities’ request for extension of the debt service suspension. Further OCC meetings on specific debt treatment proposals are expected in December 2024.  \n1. Debt coverage under this Debt Sustainability Analysis (DSA) is consistent with the LIC– DSF guidance and previous DSAs.3 In particular, the DSA includes Federal government debt, the central bank’s debt to the IMF and two bilateral creditors, guaranteed nonfinancial public enterprises’ debt, and non-guaranteed debt of Ethio-Telecom, a major telecommunication company.4 External debt is defined according to the residency principle. Notwithstanding the comprehensive coverage, staff assumes a larger contingent liability shock of 4.5 percent of GDP than the default level of 2 percent of GDP, to account for additional risks associated with large state-owned enterprises (SOEs) . Financial market shock is assumed at 5 percent of GDP, the default level.  \n2. The coverage of debt statistics is comprehensive. The authorities publish domestic and external debt statistics of the Federal government and SOEs on a quarterly basis.5 Debt reporting continues to improve under the World Bank’s Growth and Competitiveness Programmatic Development Policy Operation series, with expanded coverage of SOE domestic debt in the quarterly debt reports and the publication of an annual debt report.6  \n3 The coverage ","cbCaip3rpvPj0zsF","https://ap.wps.com/l/cbCaip3rpvPj0zsF","pdf",1187586,1,28,"English","en",105,"# Risk of external debt distress\n## Overall risk of debt distress\n# Debt sustainability drivers\n## Exports-related indicators and weak DCC\n## Debt distress trigger and reform needs\n# Debt coverage and data sources\n## Scope of covered public and external debt\n## Treatment of contingent liabilities and shocks\n# Public debt composition and trends\n## Public and publicly guaranteed debt vs GDP","[{\"question\":\"Why is Ethiopia’s external debt assessed as unsustainable?\",\"answer\":\"The assessment attributes unsustainability to prolonged breaches of exports-related external debt indicators and reliance on a weak Debt Carrying Capacity, alongside the realization of repayment risks.\"},{\"question\":\"What led to Ethiopia being classified as being in debt distress?\",\"answer\":\"A missed Eurobond interest payment in December 2023 placed the country in debt distress, in the context of clustered debt service payments and adverse developments.\"},{\"question\":\"What conditions are expected to help restore debt sustainability?\",\"answer\":\"Timely implementation of the authorities’ reform agenda and debt relief from external creditors are required to alleviate liquidity pressures and move toward a moderate risk rating by the end of the approved ECF arrangement.\"}]",1784488711,71,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"the-federal-democratic-republic-of-ethiopia-joint-bank-fund-debt-sustainability-analysis-preliminary-risk-assessment","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/the-federal-democratic-republic-of-ethiopia-joint-bank-fund-debt-sustainability-analysis-preliminary-risk-assessment/111123/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-20","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"Why is Ethiopia’s external debt assessed as unsustainable?","Question",{"text":75,"@type":76},"The assessment attributes unsustainability to prolonged breaches of exports-related external debt indicators and reliance on a weak Debt Carrying Capacity, alongside the realization of repayment risks.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What led to Ethiopia being classified as being in debt distress?",{"text":80,"@type":76},"A missed Eurobond interest payment in December 2023 placed the country in debt distress, in the context of clustered debt service payments and adverse developments.",{"name":82,"@type":73,"acceptedAnswer":83},"What conditions are expected to help restore debt sustainability?",{"text":84,"@type":76},"Timely implementation of the authorities’ reform agenda and debt relief from external creditors are required to alleviate liquidity pressures and move toward a moderate risk rating by the end of the approved ECF 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