With a slowing decline in energy prices, OECD headline inflation rises to 6.4% in August 2023

 

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3 Oct  2023 - Year-on-year inflation in the OECD, as measured by the Consumer Price Index (CPI), rose to 6.4% in August 2023 from 5.9% in July (Figures 1 and 3). Inflation increased between July and August in 14 OECD countries, with 9 countries recording increases of 0.5 percentage points (p.p.) or more, including a further sharp rise of around 10 p.p. in Türkiye.

The year-on-year decline in energy prices observed in the past months in OECD countries slowed in August.Energy inflation rose between July and August in 25 OECD countries, while remaining negative in 11 of these 25 countries. Canada, France, Korea and Türkiye recorded increases of 10 p.p. or more, resulting in positive energy inflation in these countries. However, energy inflation remained negative year-on-year in 22 of 38 OECD countries in total. Food inflation continued to decline but at a slower pace than in previous months, reaching 8.8% in August, after 9.2% in July. Inflation less food and energy (core inflation) was broadly stable, at 6.8% in August.

Year-on-year inflation in the G7 rose to 4.2% in August from 3.9% in July, the first increase since October 2022.It rose by 0.5 p.p. or more in Canada, France and the United States. In these three countries energy inflation rose sharply. By contrast, August headline inflation continued to slow down in Italy, reaching its lowest level since January 2022. It remained broadly stable in Germany, Japan and the United Kingdom. G7 food inflation continued to fall, with declines in all G7 countries, while core inflation continued to show only a moderate decline. Non-food and non-energy items remained the main contributors to headline inflation in all G7 countries in August (Figure 2).

In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP) was broadly stable at 5.2% in August 2023 as compared with 5.3% in July. The rebound in energy prices between July and August in the euro area almost offset the fall in food inflation and the slight decline in core inflation. Eurostat’s flash estimate for September 2023 points to a fall in year-on-year inflation in the euro area to 4.3%, its lowest level since October 2021. Energy inflation and core inflation are both estimated to have declined in September. Inflation is estimated to have declined markedly in September in Germany, reflecting a base effect and the wind-down of support policies in September 2022.

In the G20, year-on-year inflation increased to 6.3% in August 2023 from 5.8% in July. Headline inflation rose in Argentina, Brazil, and Indonesia. In China, inflation ticked up to just above zero in August, following a decline the previous month. Headline inflation remained stable in South Africa, while it decreased in India and Saudi Arabia.

Visit OECD Data to explore these data further.

  

 Visit the OECD Data to explore these data further.

 

Underlying data:  

• OECD, annual inflation
• G20, annual inflation
• OECD countries, contributions to annual CPI inflation by COICOP Division, current month (xlsx)
• OECD countries, contributions to annual CPI inflation, selected components, historical series (xlsx)
• G7 & non-OECD countries, zone aggregates, inflations rates, historical series graphs (xls)

  

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