Ethiopia’s economy grew by 6.9% in 2024, surpassing the regional average, driven by private spending and exports, though public investment lagged. Growth is projected to average 7.6% annually over the period to 2029, among the fastest rate globally, while inflation is set to ease to 16.2% in 2025, but remain high, hitting the vulnerable hardest. Fiscal consolidation continues as the government pursues stability, but humanitarian needs have deepened following the temporary suspension of US aid.

Ethiopia's business environment showed mixed progress from 2019 to 2024, with significant improvements in business and trade freedom, but setbacks in labour and monetary freedom. In addition, the country's judicial effectiveness and corruption issues pose risks to investor confidence. Furthermore, despite these challenges, technological advancements and a stable banking sector offer potential opportunities for economic growth and innovation.

Value sales of dairy products and alternatives in Ethiopia rose in 2025, supported by strong underlying demand, population growth, and the increasing modernisation of Ethiopia’s food system. However, growth was constrained by persistent challenges around affordability, inflation, and supply disruptions. Prices of dairy products surged by 30-40% compared with the previous year, making many products unaffordable for the majority of households. Inflation in animal feed, coupled with foreign exchang

Elevated inflation has significantly impacted the purchasing power of local consumers, making them more price sensitive when it comes to consumer health. Currency depreciation has served to push up import costs, undermining affordability. This has also boosted demand for domestically produced products, as well as imports from relatively low-cost countries, such as India.

In 2024, couples with children were the leading household type in Ethiopia, reflecting traditional family values, though a shift towards smaller family units was evident. Over 2024-2029, urbanisation and population growth are forecast to increase the number of households by 14.5%, with couples without children increasing the fastest. Increasing urban consumer expenditure and a projected 29.1% increase in disposable income per household highlight economic progress

In 2024, Ethiopia ranked 22nd in Middle East and Africa for average gross income, with a 4.3% real increase in per capita disposable income, driven by economic growth and increasing labour productivity. However, this growth was modest compared to the 8.3% in 2023 and remained below the regional average. Moreover, the government's tax and fiscal reforms, along with the opening of the foreign exchange market, contributed to this improvement, but income inequality and the gender employment gap pers

Retail value sales of snacks in Ethiopia rose in 2025, supported by a combination of expanded local manufacturing capacity, rising urbanisation, and the growing availability of packaged snack options in regional markets. However, growth was tempered by persistent inflation, a weakening currency, and low wage progression, which collectively placed pressure on household budgets. These economic challenges prompted many consumers to reduce consumption frequency or shift towards more affordable forma

Alcoholic drinks in Ethiopia faced a slight decline in total consumption in 2024, shaped by rising prices and shifting economic conditions. The overall contraction was largely driven by a series of fiscal and structural developments, including higher excise taxes on alcohol, a widening gap in the foreign exchange rate, and the impact of urban redevelopment initiatives that resulted in the demolition of bars and restaurants in key hospitality corridors. These factors combined to limit both supply

Retail volume sales of cigarettes in Ethiopia continued to expand at a robust pace in 2024, but the liberalisation of the foreign exchange rate in July 2024 effectively doubled raw material import costs, contributing to a sharp increase in cigarette prices. Pipe tobacco remains prevalent in rural areas, while illegally smuggled tobacco for use in shisha and hookah pipes is widely consumed by young adults, with e-vapour products also growing in popularity among this group.

In 2024, tissue and hygiene sales rose in value terms. Sales are being driven by urbanisation, rising hygiene awareness, and expanding retail access, while economic pressures are pushing consumers towards affordable, value-orientated products. The market is growing steadily, with nappies/diapers/pants and toilet paper being among the most popular.

Sales of beauty and personal care in Ethiopia rose substantially in 2024 in current value terms and somewhat more moderately in volume terms. The overall growth of the market was shaped by a mixture of rising awareness and consumer interest, inflationary pressures, and exchange rate liberalisation. Social media continued to play an instrumental role in shaping product awareness and driving trends across categories, with influencers providing skin, hair, and fragrance recommendations that impacte

The population of Ethiopia is predicted to decline by 42.7%, due to changes in net migration and natural change, standing at a total of 188 million citizens by 2040. By 2040, young adults (aged 18-29) will make up most of the population. Ethiopia’s birth rate is expected to fall between 2024 and 2040. Generational cohorts will continue to influence consumer expenditure based on their specific purchasing habits and unique demands.

The group of major emerging economies, BRICS, has seen a rapid rise in economic power during recent decades. As the group expanded further to include more members in recent years, its growing economic and demographic influence is reshaping global trade, investment and consumer market dynamics. This report explores the implications of BRICS expansion for the global economic and consumer landscapes, highlighting key risks and opportunities for businesses.

High inflation and currency depreciation have driven price increases across staple foods in Ethiopia in 2024, forcing consumers to prioritise essentials like grains, pulses, and edible oils. Political instability and climate crises have worsened food insecurity, especially in Tigray. Informal markets remain dominant due to affordability, though formal retail is expanding in urban areas. Government efforts to boost local production, particularly in wheat and rice, aim to reduce import reliance an

Challenges remain for economic freedom and conflicts have severely dented peace, but external help is backing state finances. The economy continues to exhibit strength and, although still high, inflation has fallen, but reliance on agriculture is a key risk. Income inequality is widening and the gender gap is meaningful, but a large children’s cohort will support spending in related items. Whilst mobile usage is growing strongly, internet penetration is low, but e-governance is making progress.

Cooking ingredients and meals returned to total volume growth in Ethiopia in 2024. The edible oils category continued to dominate sales during the year. As essential products, edible oils are resilient in times of economic difficulties, such as those seen in the second half of the review period. Meanwhile, stock cubes and powders and tomato pastes and purées continued to dominate sauces, dips and condiments, but demand for cooking and table sauces grew as local diets became more Westernised.

In 2024, home care in Ethiopia has faced rising prices due to high inflation and a foreign exchange shortage, limiting consumer demand. Small-scale manufacturers of liquid detergents have grown, meeting price-sensitive needs, while private label products have gained traction as affordable alternatives to premium brands. Consumers prefer multi-purpose and larger-sized products for cost efficiency, while liquid detergents continue to outpace bars. Security issues in Amhara and Oromia have hindered

Coffee continued to shape the performance of hot drinks in Ethiopia in 2024, as a traditional and very popular beverage in the country. While most coffee is sold unpackaged via informal retailing, packaged fresh coffee products continued to gain popularity in urban areas. The consumption of packaged tea also rose in 2024. Black tea remained most popular, although fruit/herbal tea gained traction. On the other hand, other hot drinks remained a negligible category at the end of the review period.

This report covers the retail sector in frontier markets in Sub-Saharan Africa. Euromonitor International’s definition of the region includes the following countries: Angola, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Cameroon, Tanzania and Uganda. Frontier markets in Sub-Saharan Africa exclude South Africa and Nigeria.

In 2024, all significant categories of soft drinks in Ethiopia saw good total volume growth, supported by fast urbanisation and population growth, improving economic indicators, stronger distribution, advertising and company activity. Bottled water, with by far the fastest total volume growth in 2024, continued to gain from the concerns over the quality and safety of tap water. However, hikes in operational costs and product prices still constrained the production and consumption of soft drinks.

Mekele and Hawassa are Ethiopia’s most economically vibrant cities achieving the highest GDP per capita, while Dire Dawa holds the highest potential for future economic growth. However, challenges for the country’s cities will persist in the near term due to the continuing global economic slowdown and the impact of tight financial conditions. In the longer run, Ethiopia’s cities are set to face burdens on infrastructure, due to large and increasing populations.

The commodities country overview provides comprehensive data on production, consumption and price trends on key commodities markets. The commodities overview in Ethiopia covers production and consumption trends in agricultural commodities, energy products, electricity, metal products as well as an overview of key economic and business environment trends.

The briefing examines how the coffee commodity is performing globally and in the largest countries in terms of supply and production. The report also provides data and analysis on coffee price dynamics, as well as analysing trends across key commodity consuming industries.

The global economy is facing weaker growth and increasing fragmentation, as a result of rising geopolitical tensions, especially due to the war in Ukraine and the US-China strategic rivalry. Protectionism, industrial policy and a focus on resilience are altering the global trade and foreign direct investment landscapes, creating considerable risks. Yet, the changing global operating environment also comes with new growth opportunities in the years ahead, especially in the Asia Pacific region.