Finance Minister Ahmed Shide told parliament that the economy was forecast to expand 8.9% in fiscal year 2025/2026.
Ethiopia to post faster growth despite debt, inflation
A statue of Ethiopia's last Emperor, Haile Selassie, after its unveiling at the African Union in Addis Ababa, Sunday, Feb. 10, 2019
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It had been originally projected to grow 8.4%.
Ethiopia, one of Africa's fastest growing economies remains tied down by debt debt, inflation and currency shortages.
Last year, Addis Ababa secured a $3.4 billion bailout from the International Monetary Fund (IMF) after receiving guarantees for debt relief from major creditors including China and the Paris Club.
In exchange, it agreed to stop propping up its currency and to carry out a 30% devaluation.
That condition has been partly blamed for rampant inflation which stood at 14.4% in April.
As a measure, the central bank has maintained tighter control over money supply and limited private-sector lending. Ethiopia is also required to open its banking and telecom sector to foreign investment.
Ethiopia's economy has suffered back to back blows from Covid-19, a war in the northern region of Tigray and conflict in Ukraine.