International Creditors Extend Ethiopia's Time to Complete IMF Support Deal.

Ethiopia has been granted an extension until the end of June by its international creditors, The Paris Club, to secure a bailout deal with the IMF as reported by Reuters.

The big picture: This comes after the country missed a $33 million coupon payment on its $1 billion Eurobond due at the end of December 2023, making it the third African country after Ghana and Zambia to default on a Eurobond. The IMF loan agreement, which should have concluded in March 2024, is necessary for the Ethiopian government to cope with its increasing debt repayment and economic challenges.

The bottom line: Despite these challenges, Ethiopia's projected GDP is promising at 6.7%, and the country is implementing economic reforms such as allowing foreign investment banks to operate locally and setting up a securities exchange body for local companies to be listed. The Paris Club's decision to suspend debt payments in the meantime gives Ethiopia more time to conclude a bailout plan with the IMF urgently.

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