Last year, the budget deficit reached 4.2% of the GDP, exceeding the global threshold set at three percent. The recently proposed 801 billion birr budget earmarked for the next Ethiopian fiscal year also comes with a 281 billion birr deficit. Out of the total budget, 203.9 billion birr will be used for capital expenses, leaving a recurrent budget allocation of 369.6 billion birr. In addition to allocating 14 billion birr for the advancement of sustainable development goals, the budget also included 214.07 billion birr for regional subsidies. According to Zegeye Muluye (PhD), an MP, there are two major factors that contribute to the budget deficit.

Source: Ethiopian News June 12, 2023 18:50 UTC