HISTORIC! In a significant economic milestone, Ethiopia has officially reclaimed its position as East Africa’s largest economy following a comprehensive rebasing of its national accounts.

The Ethiopian government announced a rebased Gross Domestic Product (GDP) of $210.7 billion (approximately 31.86 trillion birr) for the 2025/26 fiscal year. This revised figure places Ethiopia well ahead of Kenya’s nominal GDP of $151.15 billion.

The rebasing exercise, which updated the base year to better capture emerging sectors such as the digital economy, modern trade, manufacturing, and mining, boosted the measured size of Ethiopia’s economy by nearly 60% compared to previous estimates. The new data also elevates Ethiopia to Africa’s fifth-largest economy, behind South Africa, Egypt, Nigeria, and Algeria.

Finance officials described the revision as a reflection of structural changes in the economy and an exercise in statistical sovereignty aligned with international standards. The updated figures improve key ratios, including lower debt-to-GDP and tax-to-GDP metrics on paper, while providing a more accurate picture for policymakers, investors, and development partners.

This development reverses Kenya’s recent brief lead in the regional ranking and underscores Ethiopia’s continued economic scale and potential in East Africa.

Further details and analysis to follow.