OECD headline inflation edges up to 6.0% in December 2023

 

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7 Feb 2024 - Year-on-year inflation in the OECD, as measured by the Consumer Price Index (CPI), increased from 5.8% in November to 6.0% in December 2023 (Figures 1 and 2), after three consecutive months of decreases. Increases were recorded in 14 OECD countries, while inflation declined in 21 countries and was stable in the remaining 3 countries. Inflation was below 10% in all countries except Türkiye. Inflation excluding food and energy (core inflation) was broadly stable in the OECD, at 6.7% in December, still 0.7 percentage point (p.p.) above headline inflation. The decline of food inflation in the OECD slowed compared to recent months, standing at 6.7% in December after 7.1% in November. Nevertheless, declines in food inflation were recorded in 31 OECD countries. Energy inflation in the OECD remained negative for the eighth consecutive month.

OECD inflation in 2023 was about 2.5 percentage points below its 2022 annual average (6.9% compared with 9.5%), driven mainly by energy deflation (-0.9% annual average in 2023 compared to 29.6% in 2022). OECD food inflation in 2023 was also below its 2022 level but remained above 10%. By contrast, OECD core inflation was higher in 2023 than in 2022 (7.0% in 2023 and 6.7% in 2022), reaching its highest annual average rate since 1990.

In December 2023, year-on-year inflation in the G7 was broadly stable at 3.2%, compared to 3.1% in November. The largest increase was registered in Germany, where inflation rose to 3.7% in December from 3.2% in November, reflecting a base effect due to a one-off measure on gas and heating bills (known as "December immediate assistance") in December 2022. Smaller increases were observed in Canada, France, and the United States, while it declined in Japan for the second month in a row. Non-food and non-energy items were the main contributors to headline inflation in most G7 countries in December (Figure 3).

In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP) rose to 2.9% in December after falling for several months, mainly due to the slowdown in energy deflation. Food and core inflation both continued to decline. In January 2024, Eurostat’s flash estimate pointed to a slight decline in euro area headline (to 2.8%) and core inflation.

In the G20, year-on-year inflation rose to 6.5% in December (from 5.8% in November), its highest level since April. Inflation decreased in South Africa, Indonesia, and Saudi Arabia, but continued to surge in Argentina. In China, inflation remained negative for three months in a row. It was broadly stable in Brazil and India.

  

 

Underlying data:  

• 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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