Ethiopia’s Inflation Climbs to 13.9% in June as Food Prices Keep Pressure on Cost of Living

Ethiopia’s annual inflation rate rose to 13.9% in June 2026, up from 13.4% in May, marking a continued acceleration in consumer prices after inflation had eased to single digits at the end of 2025.

The increase was primarily driven by food inflation, which climbed to 15.1%, reflecting persistent increases in the prices of essential food items. Non-food inflation also remained elevated, with transportation and non-alcoholic beverages continuing to exert upward pressure on household spending.

The latest figures extend a reversal of the country’s earlier disinflation trend. Headline inflation had fallen to 9.7% in December 2025 before rising to 11.7% in April, 13.4% in May, and now 13.9% in June, underscoring renewed price pressures across the economy.

The inflation uptick comes shortly after the National Bank of Ethiopia (NBE) tightened monetary policy by raising its benchmark policy rate from 15% to 16%, the first increase since the country adopted its interest rate-based monetary policy framework in 2024. The central bank said the move was intended to contain inflationary pressures, anchor inflation expectations, and safeguard macroeconomic stability amid rising external risks, including higher global oil prices.

Alongside the rate hike, the NBE has continued refining its foreign exchange framework, introducing measures aimed at improving market functioning and supporting exchange rate stability as Ethiopia advances broader macroeconomic reforms. These reforms are part of the government’s ongoing efforts to strengthen monetary transmission, rebuild foreign exchange reserves, and maintain economic stability under its IMF-supported program.

While inflation remains significantly below the peaks recorded in recent years, the renewed rise highlights the challenge policymakers face in balancing economic growth with price stability, particularly as food costs continue to weigh on household purchasing power. The central bank has reiterated that reducing inflation to single-digit levels remains its primary monetary policy objective.