Moody’s report on the credit analysis of Ethiopia on Friday, May 29, 2015 reads that Ethiopia’s favorable growth and debt burden prospects and low debt burden supported its B1 rating, MoFA reported.

Moody said the current government bond rating (B1 Stable) is supported by Ethiopia’s strong growth prospects, prudent fiscal management and large stable donor inflows.

The report says "we expect public sector investment to continue to drive economic expansion in the near-term, with growth averaging around 10% in real terms over the next two years.”

According to the report, 60% of the government expenditure was on public investment projects such as health, education, agriculture and transport.

Moody’s report furthers, tax collection was not satisfactory and the government needed to implement effective revenue-enhancing measures.

There had been a slight peak in debt servicing costs; were still low compared to peers, and the debt burden and servicing costs were small.

The Credit Analysis was based on Ethiopia’s economic strength, institutional strength, fiscal strength and susceptibility to event risk, the four main analytic factors in Moody’s Sovereign Bond Rating methodology.

Source: Walta Information Center