Inflation Again Accelerates in the OECD Area
The Organization for Economic Cooperation and Development (OECD) in March 2022 published its January 2022 inflation statistics and confirmed the record-breaking figures of December 2021.
Inflation in the OECD area rose to 7.2% in the 12 months to January 2022, compared with 6.6% in December 2021, and just 1.6% in January 2021.
Similar to last month, this increase was driven in part by yet another surge in Turkey (to 48.7% in January vs 36.1% in December and 21.3% in November). Excluding Turkey, inflation in the OECD area increased more moderately to 5.8%, after 5.6% in December.
Excluding food and energy, OECD year-on-year inflation also rose sharply to 5.1%, compared with 4.7% in December.
Inflation increased in most G7 economies, except in Germany and Japan. The most significant increases between December 2021 to January 2022 were recorded in Italy, the United States and Canada with rises by 0.9, 0.5 and 0.3 percentage point (pp) respectively.
Inflation excluding food and energy was the main driver of overall inflation in the United States, the United Kingdom and Canada.
Energy prices continued to make a substantial contribution to overall inflation in all G7 countries, ranging from 1.1 pp in the United Kingdom to 3.2 pp in Italy, where it was the main contributor to overall inflation.
The contributions of food price inflation remained limited, ranging from 0.3 pp in France to 0.8 pp in Canada.
In Germany, the decrease in inflation is explained by the end of temporary factors, such as a VAT reduction and the sharp decline in mineral oil product prices in 2020, which had an upward effect on inflation in 2021. In Japan, inflation of fresh food and of selected services, including repair, maintenance, culture, and recreation, slowed down significantly.