Addis Abeba – A new joint World Bank–IMF assessment has delivered a stark warning on Ethiopia’s economic outlook, declaring the country’s external debt “unsustainable” and confirming that the government is already in debt distress. ByMarch 2025,Ethiopia’s Ministry of Finance announced that an agreement in principle had been reached with official creditors to restructure $8.4 billion of the country’s $12.4 billion external debt. Minister of Finance Ahmed Shide told lawmakers in July that Ethiopia was advancing debt restructuring negotiations with creditor countries in an effort to secure $3.5 billion in debt relief. The latest report by the World bank and IMF warned that Ethiopia’s path out of distress depends on external debt relief, fiscal reforms, and export diversification. “Successful completion of debt treatment and implementation of the reform agenda would restore debt sustainability and allow exit from debt distress,” the joint assessment said.