Ethiopia offers very affordable living costs with a Cost of Living Index of 39.3 (NYC = 100). Groceries (41.2) and restaurant prices (23.8) are notably inexpensive.

The housing market is very expensive, indicated by a high property price to income ratio of 35.4 years. However, the rent index is significantly lower at 16.9, suggesting that renting is more affordable than purchasing property.

Purchasing power is low, with an index of 14.1 (NYC = 100), indicating significantly less buying power for residents compared to the NYC baseline.

Ethiopia's tax system includes progressive income tax rates, with a top rate of 35% for monthly employment income above 14,000 ETB and annual rental income above 168,000 ETB. The standard VAT rate is 15%. A new property tax (0.1% to 1% of 25% of market value) and an Alternative Minimum Tax (2.5% of turnover) were introduced in 2025.

Ethiopia ranked 159 out of 190 economies in the World Bank's Ease of Doing Business (2019) and 156th in the 2025 Index of Economic Freedom, categorized as 'repressed'. While facing challenges like regulatory complexities and access to finance, the government is actively supporting a growing startup ecosystem through initiatives and reforms.

Ethiopia has mandatory social insurance pension schemes for both public and private sector employees, with contributions from both employers (11%) and employees (7%). Benefits cover old age, disability, and survivorship. Healthcare and maternity benefits are primarily employer-liability based, with a lack of a comprehensive unemployment benefit system.

Deposits are protected up to Birr 100,000 (approximately USD 800, based on a February 2025 exchange rate of 125 ETB/USD) per depositor by the Ethiopian Deposit Insurance Fund (EDIF), with discussions underway to increase this limit. The National Bank of Ethiopia (NBE) actively supervises and regulates the banking sector, which is undergoing reforms including the adoption of Basel III standards and opening to foreign banks.