IMF Warns of Potential El Niño Impact on Ethiopian Economy

The International Monetary Fund (IMF) has warned that El Niño-related rainfall disruptions could threaten Ethiopia's agricultural output, electricity generation, and inflation outlook. The World Meteorological Organisation (WMO) has placed the probability of El Niño conditions persisting through February 2027 at near 100 percent.

According to an IMF spokesperson, prolonged dry spells and erratic rainfall patterns could lead to food shortages, reduced export earnings, and renewed inflationary pressure. Given that agriculture employs the vast majority of Ethiopia's workforce and hydropower accounts for nearly all domestic electricity generation, the IMF emphasizes that these climate-driven challenges pose significant risks to the nation's economic stability.