Ethiopia’s Consumer Price Index Hit 15.1% in August

Ethiopia’s consumer price index (CPI) rose 15.1 percent year over year in August, edging slightly down from 15.3% in July, the latest monthly inflation report reveals. The CPI, broad gauge of goods and services costs across the nation’s economy, rose 0.9% on a monthly basis, easing from a 1.1% rise in the same month last year, according to the Ethiopian Statistics Service (ESS). The August reading is the first time headline inflation slowed down after a five-month long upward trend driven by the international oil price shock emanated from the Middle East conflict. It, however, remained higher than 13.6% increase from a year ago and is running well above the Central Bank’s single digit target. Policymakers expect it rising at double-digits before moderating by Dec 2026. The Ethiopian statistics service attributed higher food and beverage cost to the elevated inflation rate in the country as rising fuel prices carry knock-on effects to the broader economy. The annual food inflation rose 14.8% in August after rising 15.7% in July, per the CPI report. The upward pressure was driven by higher average prices across major food categories. Sugar, jam, honey, and chocolate category posted the highest annual increase, hitting 38.3%, followed by rising costs of Beverages and coffee, rising 29.2%, and meat, up 22.6% from a year ago. Similarly, fruits climbed 19.1%; oils and fats rose 18.8%; and milk, cheese, and eggs were up 18.7%, while food products not elsewhere classified posted 16.8% annual gain. The CPI’s two highest weighing food components – Bread and cereals, and Vegetables – also saw substantial increases, posting 8.1%, and 12.1% annual gains, respectively, per the ESS data. Non-food inflation Continues Rising The annual non-food inflation, meanwhile, marks the thirteen-month high, posting 15.4% gain in August after raising 14.8 % in preceding month. [Source ESS] All consumer services and goods categorized under the non-food CPI’s four components saw their average prices increases, contributing to the overall inflationary pressure. The price uptick in education catagory was the highest, surging 25.3% from a year ago, per ESS. It was followed by alcoholic beverages and tobacco, rising 18.8%, and those under miscellaneous goods and services – at 19.3%. Transport services costs also rose 15.6% from a year ago matching the annual increase in July – a potential indicator that high fuel prices were filtering through other areas. Prices consumers pay for furnishing and routine household maintenance jumped 16.7% while the cost of housing, water, electricity, gas and other fuels – which consists the non-food CPI’s highest weighing component – rose 13.7%. Other notable contributors to non-food inflation include a 14.7% increase in clothing and footwear, 14.6% rise restaurant and hotels services,, 12.8% spike health service, and 8.0% rise in communication services from a year ago.