Ethiopian lawmakers on Tuesday approved the government's plan to increase spending by an additional 581.98-billion Ethiopian birr for the 2024/25 fiscal year, a parliament broadcast showed.

The extra spending approved by cabinet last week, supplements the already announced expenditure of 971.2-billion birr for 2024/25, marking a 21% increase from the previous year. Ethiopia's fiscal year begins on July 8 and ends on July 7.

Finance Minister Ahmed Shide told lawmakers that a portion of the additional funds would be allocated to subsidise costs of fertiliser, oil, fuel, and medicine.

The East African nation is coming out of several economic shocks including the impact of the Covid-19 pandemic, a devastating two-year war in the northern Tigray region, and extreme weather events.

It secured a four-year, $3.4-billion programme from the International Monetary Fund shortly after floating its currency on July 29. This move laid the groundwork for a long-awaited debt restructuring.