Ethiopia has reached a staff-level agreement with the International Monetary Fund (IMF) for the fifth review of its economic reform program, securing praise for its tight monetary policy, which the IMF considers crucial for combating inflation. An IMF team, led by Alvaro Piris, visited Addis Ababa from May 6-20, 2026, and continued discussions virtually. Despite favorable macroeconomic outcomes like improved output, exports, reserves, and revenue through early 2026, with declining inflation, the recent conflict in the Middle East has introduced significant external shocks. These shocks include trade disruptions and increased prices for fuel and fertilizer. However, Ethiopian economic activity remains robust with modest impacts on growth and inflation thus far. The IMF highlighted rising risks due to global uncertainty and commodity price volatility, emphasizing the need for careful resource management and continued structural reforms to foster private sector-led growth. Progress is also being made on external debt treatment to ensure sustainability.