The National Bank of Ethiopia (NBE) has released its third Financial Stability Report, describing the nation’s financial system as "resilient and low-risk" for the 2024/25 fiscal year. Despite global economic pressures, Ethiopia saw improved growth and declining inflation, creating a more stable environment for banks and insurers.

Key Highlights:

Banking Resilience: Sector-wide improvements were recorded in capital, liquidity, and profitability. Stress tests confirm banks are well-equipped to handle credit and foreign exchange shocks.

Digital Explosion: Transaction values nearly doubled to over ETB 18.5 trillion, significantly advancing financial inclusion.

Emerging Risks: The NBE warned that rapid digital expansion has heightened exposure to cyber-attacks and fraud, calling for stronger technological safeguards.

Positive Outlook: For the 2025/26 year, the central bank expects single-digit inflation and continued economic expansion.

The report concludes that fiscal reforms, including lower budget deficits and sustainable debt management, have successfully reinforced the country's overall financial health.