OECD inflation rises to 5.9% in July 2023

Inflation rates fell in 26 of the 38 OECD nations, with 17 of these countries recording declines greater than 0.5 percentage points. Energy inflation within the OECD remained negative, sitting at minus 7.5 per cent, improving from minus 9.6 per cent in June. Meanwhile, core inflation, which excludes food and energy prices, edged up to 6.7 per cent from 6.6 per cent in the prior month, OECD said in a press release.

Among the G7 countries, the UK saw the largest drop in energy inflation, yet still maintains the highest inflation rate among G7 nations at 3.9 per cent. Headline inflation rates fell in Italy, France, and Germany but increased in Canada and the US. Despite this, both nations’ headline rates remain more than 2.5 percentage points below the average OECD rate. In Japan, headline inflation remained stable, and non-food, non-energy items were the main inflation drivers in all G7 countries for July.

In the Euro area, the harmonised index of consumer prices (HICP) continued to decline, albeit at a slower pace, registering at 5.3 per cent in July 2023, down from 5.5 per cent in June. According to Eurostat's flash estimate for August, HICP inflation is believed to have remained stable across the Eurozone, although there was a spike to 5.7 per cent in France due to rising energy prices. In contrast, rates in Germany and Italy remained broadly stable or declined.

Energy deflation in the Euro area was less severe in August, and core inflation is estimated to have slowed to 5.3 per cent, after standing at 5.5 per cent in July.

The G20 also experienced an inflation hike, reaching 5.8 per cent in July 2023, up from 5.5 per cent in June. India and Brazil saw inflationary increases, while Argentina, South Africa, Saudi Arabia, Indonesia, and China recorded declines. China experienced negative total inflation for the first time since February 2021.

ALCHEMPro News Desk (DP)