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E-book Ethiopia 2030 : A Country Transformed
Spurred by public investment, its growth rate averaged more than 9 percent between 2000 and 2017. Gross domestic product per capita (measured in purchasing power parity or PPP has risen nine-fold since 1991, but remains low
compared to other parts of the world (for example, emerging and developing Asian countries (figure 1)). Initially, per capita GDP growth barely exceeded population growth but accelerated after 2003, driven by public sector investment (figure 2). Compared to its peers, the country has had a relatively high investment-to-GDP ratio of 31.7 percent for the period 2017-2022, compared to the SSA average of 22 percent for the same period. Its savings-to-GDP ratio during the same period was 27.3 percent, higher than the SSA average of 19.8 percent. However, private investment in Ethiopia lags compared to many of its peer countries. Strong improvements in social well-being also reflect the country’s economic progress. Between 2000 and 2021, Ethiopia’s Human Development Index (HDI), value increased by 73.5 percent; infant mortality fell by half; life expectancy at birth increased by 14.4 years, reaching 65 years; expected years of schooling increased by 5.3 years; and gross national income per capita rose by 225 percent. Between 2000 and 2016, headcount poverty declined markedly from 44.2 percent to 23.5 percent, supported by expanded social safety nets and fiscal transfers. Taking a broader view, the incidence of multidimensional poverty in Ethiopia, however, stands at 68.8 percent4, indicating the strong impact of non monetary factors in determining poverty in the country. It is likely that both HDI and poverty values for Ethiopia deteriorated in 2020-2022, when the country experienced several shocks.
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