Ethiopia’s inflation rate drops further in July to 33.5%
The inflation rate in Ethiopia dropped slightly from 34.0% to 33.5% in July, Business Insider Africa has learned.
This is the second consecutive drop since May 2022, when the country’s inflation rate rose as high as 37.2%, according to figures made available by the Central Statistics Agency of Ethiopia.
Inflation in the Horn of Africa country picked up pace in April 2022, accelerating to 36.6% from 34.7% in March. By June, it increased further to 34.0%, the highest level recorded since 2011.
The upward inflationary pressure witnessed in Ethiopia in recent months was due mainly to surging food prices and increased demand for products and services.
However, Reuters reported that the July ease was courtesy of food inflation dropping to 35.5%, from 38.1% in June.
Despite this, Ethiopia still has one of the highest inflation rates in Africa. A previous article by Business Insider Africa listed these ten African countries with the highest inflation rates: Sudan, Zimbabwe, Ethiopia, Angola, Sierra Leone, Ghana, Nigeria, South Sudan, Zambia and Sao Tome & Principe.
The three components of Ethiopia’s consumer price index are food and non-alcoholic beverages, housing and utilities and clothing & footwear.
According to Investopedia, inflation occurs when there is a decline in the purchasing power of a currency. It is measured by the rate at which the prices of goods and services rose within a particular period.
A sharp increase in the cost of raw materials is often one of the primary causes of inflation. A surge in demand for goods and services can also trigger an upsurge in prices, thus leading to high inflation.