World Bank says Ethiopia’s poverty rate expected to climb to 43% in 2025, reversing years of progress
The World_Bank’s latest assessment on poverty and equity in Ethiopia forecasts that poverty will increase to 43% by 2025, up from 33% in 2016 (measured at $3 per day, 2021 PPP).
After making significant strides in reducing poverty for over two decades, Ethiopia has in recent years encountered internal and external challenges that impacted living standards, the World Bank says. These challenges include the COVID-19 pandemic, the Tigray conflict, severe droughts, a slowdown in GDP growth, and soaring inflation.
As a result, poverty levels rose sharply from 33 percent in 2016 to 39 percent by 2021 (measured at $3 per day, 2021 PPP), with expectations of further increases in subsequent years, according to the World Bank.
Inflation hit urban households hardest, while most rural families did not benefit from higher food prices due to limited market engagement.
In September 2025 in a new joint assessment World Bank–IMF 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.
Please wait, video is loading...
