Ethiopia's Inflation Rate Drops to 14.6% in October

The Ethiopian Statistics Service announced that the inflation rate decreased to 14.6% in October from 14.9% in September. While food inflation remains a challenge, with significant increases in prices for meat, dairy, and bread, non-food inflation also rose to 15.4%. National Bank of Ethiopia Governor Eyob Tekalign attributed the inflationary pressure largely to external global factors outside the government's control.

However, financial expert Dr. Abdulmenan Mohammed challenges this, arguing that excessive money supply growth—driven by the National Bank's gold purchases—is the primary driver. He contends that this surge in liquidity undermines the bank's ability to use interest rate policies effectively to combat inflation. Consequently, he suggests that the National Bank faces a difficult trade-off between stabilizing the exchange rate and controlling inflation.