Consumers Reel as Headline Inflation Bites

The statistical agency's latest data indicated that the average price change of goods and services in February grew by 20.6pc. The report comes as the cost of living rises following the never-ending increase in the prices of food items and other commodities.

The consumer price index (CPI) from the Central Statistical Agency indicated that Ethiopia’s inflation pace last month only increased by 1.4 percentage points from the previous month. However, the prices of most items in the market skyrocketed, exerting pressure on consumers.

Unlike in previous months, the food inflation growth rate last month slowed down slightly by 0.3 percentage points to 22.8pc, according to the Agency. Usually, food inflation is behind the accelerating headline inflation.

Price escalation of cereal products hastens food inflation, according to the report from the Agency. Vegetables and pulses types; sugar; edible oil; spices, mainly pepper; potatoes; and coffee have contributed to an increase in the rate of inflation, it indicated.

The non-food inflation showed a rapid growth rate of 18pc due to a rise in the prices of alcohol and tobacco; khat; clothing and footwear; housing repair and maintenance; firewood and charcoal; medical care; transport; fuel; and gold.

The month-on-month general CPI for February, which measures the price change between the two most recent months, has increased by four percent compared to January.

The average change in the price for a basket of goods and services that consumers purchase has been hovering in two-digit rate territory for the past 15 years, far higher than the government's single-digit target. For the current fiscal year, the government aims to confine the rate to 9.5pc. However, the lowest rate registered so far this fiscal year was 18.2pc in December.

Inflation is coupled with seasonal and fast price hikes leading to the rise in the cost of living, according to Wassihun Belay, an independent economist.