Ethiopia’s annual inflation eased to 15.1 percent in August from 15.3 percent in July, ending four consecutive months of increases, although rising non-food prices continue to put pressure on households.
The latest figures from the Ethiopian Statistical Service showed that monthly consumer price growth also slowed sharply to 0.9 percent in August from 2.6 percent in July.
Despite the moderation, annual inflation remains above the 13.6 percent recorded in August last year and well above the 9.4 percent low recorded in March, when inflation had remained in single digits for four consecutive months.
Non-food prices were the main source of pressure in August, with inflation in the category rising to 15.4 percent from 14.8 percent in July. It overtook food inflation for the first time since November.
Food and non alcoholic beverages inflation, meanwhile, slowed to 14.9 percent from 15.7 percent.
Education recorded the sharpest increase among non-food items, with prices rising 25.3 percent year on year. This was followed by miscellaneous goods and services at 19.3 percent and alcoholic beverages and tobacco at 18.8 percent.
Furnishings and household equipment rose 16.7 percent, transport increased 15.6 percent, while clothing and footwear climbed 14.7 percent. Housing, water, electricity, gas and other fuels rose 13.7 percent.
Within the food basket, sugar, jam, honey and chocolate recorded the strongest annual increase at 38.3 percent. Non alcoholic beverages and coffee rose 29.2 percent, while meat prices increased 22.6 percent.
Food inflation was partly contained by slower increases in bread and cereals, which rose 8.1 percent, and vegetables, which increased 12.1 percent.
Despite the recent increase in monthly inflation, Ethiopia’s average annual inflation for EFY2018 fell to 11.7 percent from 16 percent in EFY2017, its lowest annual average since EFY2009.
The Ethiopian Statistical Service attributed the decline in average non food inflation partly to tight monetary policy aimed at limiting bank credit.
The latest figures will keep inflation on the radar of the National Bank of Ethiopia, which has said it expects price growth to moderate by December but remain in double digits over its six month forecast period.
The ESS is also expanding its price survey from 120 to 200 markets as part of efforts to improve the consumer price index. The expansion will support a planned rebasing of the CPI using expenditure weights from the EFY2017 National Integrated Household Survey.