Ethiopia is the fastest-growing economy in 2017, according to the World Bank’s latest edition of Global Economic Prospects.
Ethiopia’s GDP is forecast to grow by 8.3% in 2017. By contrast, global growth is projected to be 2.7%.
The East African country’s accelerating growth comes on the back of government spending on infrastructure.
However, borrowing to finance Ethiopia’s large public infrastructure projects has led to a rise in public debt, which increased by more than 10% of GDP between 2014 and 2016, and now exceeds 50% of GDP.
Many emerging market economies have high levels of public debt, and the World Bank says it is concerned about this because it could drag down growth.
Worsening drought conditions could also affect Ethiopia’s growth, says the report.
The outlook for the world economy
Global growth is predicted to rise by 2.7% on the back of a pick-up in manufacturing and trade, improved market confidence and a recovery in commodity prices.
Trade increased by around 4% in 2017, up from a post-crisis low of 2.4% in 2016. Although it is expected to remain below pre-financial crisis levels.
Growth in emerging markets and developing economies
As this map shows, much of Asia and Africa (in light blue) are experiencing rapid growth.
Emerging-market and developing economies are anticipated to grow 4.1% – far faster than advanced economies.