Ethiopia’s inflation hits one-year high as food prices squeeze households

The annual inflation rate in Ethiopia rose to 13.9 percent in June 2026, marking the highest level in a year and accelerating from 13.4 percent in the previous month, according to the Ethiopian Statistical Service

The figures reported on Tuesday indicate that the earlier moderation in consumer prices was short-lived, despite recent monetary policy tightening. The continued upward pressure was primarily driven by rising food costs, alongside a steady increase in non-food inflation from recent lows.

Key price movements

Annual consumer inflation stood at 13.9 percent in June, rising from 13.4 percent in May, though remaining unchanged when compared to June 2025.

On a month-on-month basis, consumer prices increased by 1.3 percent in June, showing a slight moderation from the 1.7 percent growth recorded in May.

Food inflation rose to 15.1 percent in June, maintaining a steady upward trajectory from 15 percent in May, 13.5 percent in April, and 11.7 percent in June 2025.

Meanwhile, non-food inflation accelerated to 12.2 percent in June, up from 11.1 percent in May, 9.1 percent in April, and 7.0 percent in March.

Despite this ongoing rise, non-food inflation remains significantly below the 17.4 percent recorded in June of the previous year.

Main drivers

According to the ESS, the monthly surge in food prices was largely driven by higher costs for vegetables, fruit, bread, cereals, meat, fish, and seafood, alongside price increases for milk, cheese, eggs, coffee, tea, and cocoa.

In the non-food category, upward price pressure was primarily felt in clothing and footwear, household furnishings, restaurants and hotels, as well as alcoholic beverages and tobacco.

Central bank response and policy outlook

The publication of the June data follows monetary policy tightening by the National Bank of Ethiopia (NBE) earlier this month. The central bank raised its benchmark policy rate by 100 basis points to 16 percent and lifted the 14 per cent annual credit growth cap previously placed on commercial banks.

According to a statement from the National Bank’s Monetary Policy Committee, “Inflation, which had eased following the macroeconomic reforms introduced in July 2024, began accelerating again from April, partly due to fuel supply disruptions linked to the conflict in the Middle East. The latest policy tightening aims to anchor inflation expectations and return inflation to a declining path over the medium term.”