The federal government has tabled its 2025/26 fiscal year draft budget, amounting to 1.93 trillion birr, before the Parliament. Finance Minister Ahmed Shide delivered the proposal, which is currently under parliamentary review.
The allocation includes 1.2 trillion birr for recurrent expenditures, 415 billion birr for capital investment, 315 billion birr in fiscal transfers to regional states, and 14 billion birr to support regional implementation of the Sustainable Development Goals.
According to the Minister, 73 per cent of the proposed budget, approximately 1 trillion birr, is projected to be sourced from domestic tax revenues. An additional 236 billion birr is expected from development partners, with the remainder derived from project assistance and other revenues.
The draft outlines a gross fiscal deficit of 2.2 per cent of GDP and a net deficit of one per cent. The government intends to finance the gap not through direct central bank borrowing but through Treasury bill issuance. Minister Ahmed emphasized that strict fiscal and monetary discipline will be applied to align expenditures with national income, helping to curb inflation and ensure efficient budget execution.
The budget has been formulated in line with ongoing macroeconomic reforms and the nation’s 10-year development strategy, targeting an economic growth rate of 8.9 per cent in the upcoming fiscal year.