ADDIS ABABA, March 17 (Xinhua) -- National Bank of Ethiopia said Tuesday that Ethiopia's financial system remained stable and recorded "remarkable growth" during the 2024/2025 fiscal year despite a challenging global environment.

In its third Financial Stability Report covering July 2024 to June 2025, the central bank said that despite international pressures, the East African country's domestic macroeconomic indicators showed "clear improvement," with stronger economic growth and easing inflation.

The report highlighted positive improvements in fiscal performance, including lower budget deficits and more sustainable public debt levels, which helped reduce macroeconomic vulnerabilities and played a key role in reinforcing overall financial stability.

The banking sector remained stable, resilient and low risk throughout the fiscal year, with improvements in capital adequacy, asset quality and liquidity, alongside higher profitability, the central bank said.

The report also highlighted rapid growth in digital financial services, with total transaction value nearly doubling to over 18.5 trillion Ethiopian birr (about 117.5 billion U.S. dollars), while warning of rising operational, cyber and fraud-related risks.

The central bank projected a positive outlook for the current Ethiopian 2025/2026 fiscal year, supported by expectations of continued economic growth, single-digit inflation, expanding credit and rising foreign exchange earnings. ■