ETHIOPIA · ECONOMY
Key Facts
- —The country Ethiopia is East Africa’s most populous nation, with over 120 million people and a birr that floats since July 2024.
- —What happened On Thursday 15 October, the Ethiopian Statistical Service reported that annual inflation slowed to 14.9% in September from 15.1% in August.
- —The numbers Food prices rose 14.8% and non-food prices 15.1% over a year earlier, while inflation was 13.2% in September 2025.
- —The drivers Sugar, honey and chocolate jumped 39.8% and meat 22.0%, while alcohol and tobacco rose 18.2% and transport 16.0%.
- —The central bank The National Bank of Ethiopia raised its policy rate by 1 point to 16% in July and expects inflation to stay in double digits.
- —The birr Banks bought dollars at about 161.7 birr per US dollar on 10 October, and the market rate was 161.8 on 15 October.
- —Still open The month-on-month change for September and the central bank’s next rate move are the open questions.
Ethiopia inflation eased to 14.9% in September, down from 15.1% in August, the Ethiopian Statistical Service reported on Thursday 15 October. Local outlets including Birr Metrics and Fidel Post carried the numbers the same day.
For US investors holding Ethiopian debt, the small dip matters less than the level, because prices still rise faster than a year ago. Inflation was 13.2% in September 2025, so living costs remain well above last year.
What the Statistics Service Reported
The Ethiopian Statistical Service is the government agency that tracks consumer prices in Addis Ababa and the regions. It said Ethiopia inflation was 14.9% in September, against 15.1% in August and a peak of 15.3% in July.
Food and non-alcoholic drinks rose 14.8% over a year earlier, down slightly from 14.9% in August, BusinessDay reported. Non-food prices rose 15.1%, down from 15.4% a month earlier.
Birr Metrics, an Addis Ababa business outlet, noted that non-food inflation now sits above food inflation. It wrote that this has not been the case for much of the past year.
Sugar and Meat Lead the Food Increases
Sugar, honey and chocolate were the fastest-rising food group, up 39.8% from a year earlier, according to Ethio Negari. Meat followed at 22.0%, fruit at 18.5%, oils and butter at 18.2%, and milk, dairy and eggs at 17.7%.
Vegetables rose a slower 11.4% and bread and injera, the sourdough flatbread that most Ethiopians eat daily, only 8.6%. Fidel Post, another Addis Ababa outlet, said better harvests could ease food prices in the coming months.
Transport and Alcohol Push Non-Food Prices Up
Within Ethiopia inflation, non-food prices tell the sharper story: alcohol and tobacco rose 18.2% over the year, up from 16.0% in August. Education rose 17.8%, other goods and services 17.6%, and transport 16.0%.
Restaurants and hotels were up 15.3%, health 10.9% and communication 9.6%. Many non-food goods are imported or depend on imported inputs, so a weaker birr and costly fuel feed straight through to shop prices.
What the Central Bank Has Done
The National Bank of Ethiopia is the country’s central bank, led by Governor Eyob Tekalign. In July its Monetary Policy Committee raised the policy rate by 1 percentage point, to 16%, and kept a tight stance.
The committee blamed an oil price shock tied to the Middle East conflict for renewed price pressure. It said inflation would likely stay in double digits over its six-month forecast horizon.
The same package removed the cap on bank lending growth and cut the foreign-exchange commission from 2.5% to 1.5%. It also lowered the share of export dollars that exporters must hand to banks from 50% to 30%.
The Birr and the Dollar Auctions
Ethiopia inflation is tied to the birr, which has weakened steadily since the 2024 float and raises the price of imported fuel, fertiliser and goods. Addis Fortune reported on 10 October that banks bought dollars at an average of 161.67 birr per US dollar and sold at 164.91.
The central bank’s own indicative rate was 160.99 birr per US dollar, the same paper wrote. The market rate on 15 October was about 161.8 birr per US dollar, so the currency has been broadly steady in recent weeks.
To supply dollars, the central bank plans six auctions of US$140 million each through December, as reported earlier. A steadier birr helps hold down import prices, which is one reason economists watch the auctions closely.
What It Means for US Readers
Ethiopia is restructuring a US$1 billion Eurobond that went into default in 2023, and international funds hold it. A deal announced on 29 June offers new bonds worth US$880 million, pending approval by the Official Creditor Committee of governments.
Sticky prices matter because the International Monetary Fund, whose US$3.4 billion loan programme anchors the reforms, urges tight monetary policy. The next IMF review will judge whether prices are coming under control.
For American exporters and importers, inflation near 15% raises local costs and wage demands. Readers can read the wider regional context in our guide to Horn of Africa geopolitics.
What Is Not Known
The month-on-month change for September has not been reported, so it is unclear how quickly prices rose during the month itself. The release also does not say how much each category added to the headline rate.
It is not yet known whether the central bank will raise its 16% policy rate again to cool Ethiopia inflation. Neither is it clear whether the slowdown from July’s 15.3% peak will last into the harvest season.
More: Ethiopia news in English, every day from The Rio Times.
Frequently Asked Questions
What is Ethiopia inflation for September 2026?
Ethiopia inflation was 14.9%, according to the Ethiopian Statistical Service. That is down from 15.1% in August and 15.3% in July.
Is Ethiopia inflation going up or down?
It has slowed for two months running, from 15.3% in July to 14.9% in September. It is still above the 13.2% recorded in September 2025.
Which prices are rising fastest in Ethiopia?
Sugar, honey and chocolate rose 39.8% over the year, and meat rose 22.0%. Among non-food items, alcohol and tobacco rose 18.2% and education 17.8%.
What is the National Bank of Ethiopia’s policy rate?
The policy rate is 16%, after a 1-point rise in July. The bank says tight policy is needed to bring inflation toward single digits.
How many birr does one US dollar buy in Ethiopia?
About 161.8 birr per US dollar on 15 October, based on market data. The central bank’s indicative rate was 160.99 birr per US dollar in the week to 10 October.
Sources: Birr Metrics, 15 October 2026; BusinessDay, 15 October 2026; Ethio Negari, 15 October 2026; Fidel Post, 15 October 2026; National Bank of Ethiopia, Monetary Policy Committee Meeting No. 7, July 2026; Addis Fortune, 10 October 2026; The Reporter, 26 August 2026; IMF, 3 June 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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