Ethiopia’s economic landscape is undergoing significant changes, with inflation rates reaching a five-year low, exports witnessing record growth, and foreign exchange availability improving. The latest data from the National Bank of Ethiopia (NBE) and the Ethiopian Statistical Service indicate a shift in key economic indicators, reflecting ongoing policy adjustments and market responses.
Inflation Declines to 15.5%, Lowest in Five Years
Ethiopia’s inflation rate dropped to 15.5% in January 2025, down from 29.4% in January 2024, representing a 13.9 percentage point decline. This marks the lowest inflation level recorded in the last five years.
The reduction in inflation is attributed to a combination of monetary policy measures, stabilized supply chains, and improved domestic production.
- Food inflation, which has historically been a major contributor to overall inflation, fell significantly from 32.3% in January 2024 to 15.7% in January 2025—a decline of 16.6 percentage points.
- Non-food inflation also saw a 10.2 percentage point reduction, dropping from 25.3% to 15.1% over the same period.
These trends suggest a decrease in consumer price pressures, particularly in essential goods. However, the sustainability of this decline will depend on factors such as global commodity prices, agricultural performance, and policy execution in the coming months.
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