OECD's inflation surges to 6.4% in August 2023

Fourteen OECD countries witnessed an inflation hike between July and August, with nine of them experiencing increases of 0.5 percentage points or more. Turkiye marked a noteworthy surge of approximately 10 percentage points.

The previous trend of declining energy prices in OECD nations decelerated in August. From July to August, energy inflation saw a rise in 25 OECD nations, although it remained negative in 11 of these countries. Significant increases of 10 percentage points or more were observed in Canada, France, Korea, and Turkiye, leading to positive energy inflation figures in these nations. However, 22 out of the 38 OECD countries continued to witness negative YoY energy inflation. Core inflation, which excludes food and energy, remained fairly constant at 6.8 per cent, OECD said in a press release.

Turning to the G7, inflation rates moved up to 4.2 per cent in August from 3.9 per cent in July, marking the first rise since October 2022. Notable increments of 0.5 percentage points or more were reported in Canada, France, and the US, mainly driven by rising energy inflation. In contrast, Italy experienced a slowdown in August, with the lowest inflation rate since January 2022. Germany, Japan, and the UK remained largely unchanged. Non-food and non-energy items were the dominant contributors to the G7's August inflation.

In the Eurozone, the harmonised index of consumer prices (HICP) depicted steady inflation at 5.2 per cent in August, a slight drop from 5.3 per cent in July. A preliminary report from Eurostat for September 2023 suggests that the region's YoY inflation could tumble to 4.3 per cent, the lowest since October 2021, with both energy and core inflation expected to decrease. A significant decline in inflation for September is also forecasted for Germany.

Lastly, the G20 inflation rose to 6.3 per cent in August, up from 5.8 per cent in July. Argentina, Brazil, and Indonesia experienced a rise in headline inflation. China's inflation, after a drop in July, barely surpassed zero in August. Meanwhile, headline inflation remained static in South Africa but showed a decrease in India and Saudi Arabia.

ALCHEMPro News Desk (DP)