Ethiopia’s annual inflation rate rose to 14.9 percent in September 2026, up from 13.2 percent a year earlier, as rising food prices and accelerating costs of transport, education and other services kept inflation above the government’s single-digit target, according to figures released Thursday by the Ethiopian Statistical Service (ESS).

The latest reading marks a 1.7 percentage-point increase from September 2025, with non-food inflation reaching 15.1 percent, marginally exceeding food inflation of 14.8 percent. The figures show that price pressures have extended across a broad range of household expenditures, even as inflation in some staple food categories remains below the national average.

The September data come as the National Bank of Ethiopia (NBE) maintains a restrictive monetary policy stance following an increase in its benchmark interest rate to 16 percent in July, part of measures aimed at containing inflation while the country continues implementing economic reforms.

Among food items, sugar, honey and chocolate recorded the highest annual price increase at 39.8 percent, nearly three times the national inflation rate. Meat prices rose by 22 percent, while prices of food products not elsewhere classified increased by 19.1 percent.

Fruit prices increased by 18.5 percent, followed by oils and butter at 18.2 percent, and milk, dairy products and eggs at 17.7 percent. Vegetable prices rose by 11.4 percent, while bread and injera recorded a comparatively smaller increase of 8.6 percent.

The differences among food categories indicate that households purchasing meat, dairy products and certain processed foods experienced significantly higher price increases than those reflected in the overall consumer price index.

Non-food inflation reached 15.1 percent in September, reflecting higher prices across several consumer spending categories.

Alcoholic beverages and tobacco registered an annual increase of 18.2 percent, followed by education at 17.8 percent and other goods and services at 17.6 percent. Transport costs increased by 16 percent, while restaurants and hotels recorded a 15.3 percent rise.

Health-related expenses increased by 10.9 percent, with communication prices rising by 9.6 percent.

The acceleration in non-food prices represents a notable change in Ethiopia’s recent inflation pattern. According to the ESS monthly series, non-food inflation declined to 7 percent in March 2026 before rising to 15.1 percent in September, an increase of 8.1 percentage points over six months.

Food inflation followed a different trajectory, increasing from 12.1 percent in September 2025 to 15.7 percent in July 2026 before easing to 14.8 percent in September.

Consequently, non-food inflation moved above food inflation in the latest reading, after remaining below it for much of the preceding year.

The figures point to a changing composition of inflation, with the pace of price increases moderating in food categories while accelerating in services and other non-food expenditures. The ESS release does not quantify the contribution of individual commodities or services to overall inflation, making it difficult to determine which categories accounted for the largest share of the headline increase.

The latest figures also place Ethiopia’s inflation performance against the backdrop of monetary and foreign exchange reforms introduced in July 2024, when the government adopted a market-based foreign exchange framework as part of a broader economic reform programme supported by the International Monetary Fund (IMF) and other development partners.

The reforms included changes to exchange rate determination, monetary policy operations and foreign exchange management, alongside measures to reduce monetary financing and improve the functioning of financial markets.

Inflation, which exceeded 30 percent in earlier years, subsequently moderated substantially. IMF figures show that Ethiopia’s average annual inflation declined from 32.5 percent in the 2022/23 fiscal year to 26.6 percent in 2023/24 and 16 percent in 2024/25.

However, the September reading shows that bringing inflation down to single digits remains unfinished.

In July 2026, the NBE increased its benchmark policy rate by one percentage point to 16 percent while deciding to maintain a tight monetary policy stance. The central bank also approved targeted reserve requirements linked to individual banks’ loan-to-deposit ratios as a safeguard against excessive credit expansion.

The measures accompanied the removal of restrictions on bank credit growth, with the central bank seeking to replace direct lending controls with interest-rate-based monetary policy instruments.

Previously, the NBE had maintained a 15 percent policy rate since the introduction of its interest-rate-based framework in July 2024. The July increase therefore marked a further tightening of monetary conditions following two years of efforts to strengthen the transmission of monetary policy through the banking system.

The central bank also reduced its foreign exchange commission rate from 2.5 percent to 1.5 percent in July, citing the need to lower import-related costs and contain inflationary pressures associated with foreign exchange transactions.

The September inflation figures were released against a backdrop of continued global commodity and energy market uncertainty, including disruptions linked to the Middle East conflict.

The IMF’s October 2026 World Economic Outlook identified elevated energy costs, geopolitical tensions and financial vulnerabilities among the risks facing the global economy. Higher international energy prices can affect import-dependent economies through fuel, transport and production costs, although the ESS release does not establish the extent to which external factors contributed to Ethiopia’s September inflation.

In its January 2026 assessment, the IMF projected Ethiopia’s average inflation would decline to 11.9 percent in the 2025/26 fiscal year and 8.3 percent in 2026/27. These projections represent annual averages rather than individual monthly inflation rates and are therefore not directly comparable with September’s year-on-year reading.

The September figure also follows the 13.4 percent inflation rate cited in recent government economic briefings. The latest ESS reading is 1.5 percentage points higher, although the releases refer to different reporting periods.

Despite the substantial decline from earlier inflation peaks, prices continue to increase across most major categories covered by the consumer price index.

An inflation rate of 14.9 percent means the overall price level of the representative household consumption basket was 14.9 percent higher than in September 2025. A reduction in the inflation rate would indicate slower price increases, rather than a reversal of the cumulative rise in consumer prices recorded in previous years.

The figures do not provide a direct measure of changes in household purchasing power, which also depend on wage growth, income and individual consumption patterns.