Ethiopia’s Inflation Climbs for Fourth Straight Month, Hits 15.3%
Food prices accelerate as sugar, beverages and meat record some of the steepest annual increases
Ethiopia’s annual inflation rate climbed for a fourth consecutive month, reaching 15.3 percent in July EFY 2018, as food and non-food prices continued to rise, according to the Ethiopian Statistical Service (ESS).
The latest reading marks a significant reversal from the easing trend recorded earlier in the fiscal year. Inflation stood at 9.4 percent in March before increasing to 11.7 percent in April, 13.4 percent in May, 13.9 percent in June, and 15.3 percent in July.
Four Months of Rising Inflation
| Month | Headline Inflation | Change from Previous Month |
| April EFY 2018 | 11.7% | +2.3 percentage points |
| May EFY 2018 | 13.4% | +1.7 percentage points |
| June EFY 2018 | 13.9% | +0.5 percentage points |
| July EFY 2018 | 15.3% | +1.4 percentage points |
Over the four months, headline inflation increased by 3.6 percentage points, from 11.7 percent in April to 15.3 percent in July.
The July increase was particularly notable on a monthly basis. General prices rose 2.6 percent during July alone, compared with 0.9 percent in June. Food and non-alcoholic beverages increased 2.2 percent month-on-month, while non-food prices rose 3 percent.
Food Inflation Reaches 15.7%
Food and non-alcoholic beverages remained one of the major sources of inflationary pressure, recording 15.7 percent year-on-year inflation in July.
The increase was broad-based, with several major food categories recording double-digit price increases.
| Food Category | July Year-on-Year Inflation |
| Sugar, jam, honey & chocolate | 39.4% |
| Non-alcoholic beverages & coffee | 33.0% |
| Meat | 21.6% |
| Oils & fats | 20.3% |
| Fruits | 19.2% |
| Milk, cheese & eggs | 18.9% |
| Other food products | 18.2% |
| Vegetables | 13.6% |
| Bread & cereals | 8.0% |
| Food & non-alcoholic beverages overall | 15.7% |
Source: Ethiopian Statistical Service.
Sugar, jam, honey and chocolate recorded the steepest annual increase at 39.4 percent, followed by non-alcoholic beverages and coffee at 33 percent.
Meat prices increased by 21.6 percent, while oils and fats rose 20.3 percent. Milk, cheese and eggs increased 18.9 percent, and fruits rose 19.2 percent.
What Happened in July Alone?
The pressure was also visible in monthly price movements.
| Food Category | July Month-on-Month Change |
| Meat | +4.4% |
| Non-alcoholic beverages & coffee | +3.2% |
| Other food products | +2.7% |
| Oils & fats | +2.5% |
| Fish & seafood | +2.4% |
| Milk, cheese & eggs | +1.2% |
| Food & non-alcoholic beverages overall | +2.2% |
The figures suggest that food-price pressure was not simply a comparison with higher prices a year earlier; several food categories also recorded substantial increases within July itself.
Non-Food Inflation Stands at 14.8%
Non-food inflation reached 14.8 percent in July, with price increases spread across housing, transport, education, restaurants and other household expenses.
| Non-Food Category | July Year-on-Year Inflation |
| Education | 25.3% |
| Miscellaneous goods & services | 19.3% |
| Alcoholic beverages & tobacco | 16.0% |
| Transport | 15.6% |
| Restaurants & hotels | 15.3% |
| Furnishings & household equipment | 15.2% |
| Clothing & footwear | 15.0% |
| Housing, water, electricity, gas & other fuels | 13.3% |
| Health | 12.8% |
| Communication | 8.0% |
| Non-food overall | 14.8% |
Education recorded the highest annual increase among the listed non-food categories at 25.3 percent, while miscellaneous goods and services increased 19.3 percent.
Housing, water, electricity, gas and other fuels—which carry the largest weight among the major non-food categories—rose 13.3 percent year-on-year.
The Monthly Picture
The July data show that price pressure intensified considerably compared with June.
| Measure | June EFY 2018 | July EFY 2018 |
| General inflation, month-on-month | 0.9% | 2.6% |
| Food & non-alcoholic beverages | — | 2.2% |
| Non-food | — | 3.0% |
The general month-on-month inflation rate of 2.6 percent was the highest monthly reading in the fiscal-year series presented by the ESS.
Within non-food items, housing, water, electricity, gas and other fuels increased 3.3 percent during July. Transport rose 3 percent, restaurants and hotels 3 percent, and furnishings and household equipment 3 percent. Communication was the only listed category to record a decline, falling 1.4 percent during the month.
Longer-Term Inflation Remains Lower
Despite the sharp rise in the latest annual figure, the 12-month moving-average inflation rate stood at 11.9 percent in July.
That measure had declined steadily from 15.6 percent in July EFY 2017 to 11.7 percent in June EFY 2018 before edging up to 11.9 percent in July.
The broader fiscal-year averages also show an improvement compared with the previous year. Average annual food inflation fell to 12 percent in EFY 2018, from 16.2 percent in EFY 2017, while average annual non-food inflation declined to 11.3 percent, from 15.8 percent.
Still, the latest monthly and annual figures point to renewed inflationary pressure entering the next fiscal year, particularly from food and essential household expenditures.