Ethiopia’s annual inflation rate dropped to 9.7 percent in February 2026, down from 15 percent recorded during the same period last year, according to newly released official data. The figures indicate that price pressures across the economy are gradually easing, offering some relief for consumers after a period of elevated inflation.
Despite the overall decline, food prices continue to play a central role in the country’s inflation dynamics. Data shows that food and non-alcoholic beverages increased by 10.8 percent year-on-year. Price increases were recorded in several key items, including vegetables, meat, dairy products, eggs, fruits, cooking oil, and sugar.
Food costs remain a significant component of household spending in Ethiopia, and fluctuations in domestic supply often influence the overall inflation trend. Changes in agricultural output, distribution, and market supply can quickly affect prices across local markets.
Non-food inflation stood at 8.1 percent during the same period. Within this category, transportation costs recorded a 13.3 percent increase, reflecting ongoing pressures linked to fuel prices and logistics. Household goods rose by 10.6 percent, while prices in the restaurants and hotels sector increased by 12.4 percent.
Miscellaneous goods and services recorded one of the highest increases, rising by 17 percent compared to the previous year. Communication services also saw prices increase by 10.4 percent, while alcohol and tobacco prices rose by 7.9 percent.
Overall, both month-on-month and year-on-year data suggest that inflationary pressures are moderating compared with previous levels. While prices in several sectors are still rising, the pace of increase has slowed, indicating a gradual stabilization in the broader economy.
Analysts note that the easing inflation trend could support the National Bank of Ethiopia’s ongoing efforts to stabilize the birr and manage price pressures without slowing economic activity. However, they also point out that food prices remain sensitive to domestic supply conditions and could continue to influence inflation trends in the coming months.