The Price Floor Problem

Stabilisation at 9.7% inflation means the basket of necessities is getting more expensive more slowly — not that it has stopped. The consumer price level is 5.4 times its 2016 base. An Afrobarometer survey found that 87% of Ethiopians went without a cash income at least once in the previous year. The electricity tariff increase of 122% in September 2024 compounded a birr depreciation that had already raised the cost of imported fuel, medicine, and inputs.