Ethiopia 's economy is growing strongly. The International Monetary Fund (IMF) forecasts real growth of 9.2% for the 2025–26 fiscal year. But renewed fighting in the north , high reconstruction costs and climate-related crop problems are threatening the country's economic recovery.

London-based financial analyst Abdulmenan Mohammed warns of the consequences of further escalation . "If there is a major conflict [...] the current economic growth will not be sustainable," he told DW.

Ethiopia's PM Abiy Ahmed visits an industrial park in Hawassa, the capital of the Sidama region, in August 2025 Image: Ethiopian Prime Minister Office

The costly legacy of the Tigray war

The war that raged in Tigray and other parts of Ethiopia between 2020 and 2022 inflicted extensive damage.…