Updated: September 5, 2023

The latest data from the OECD reveals that year-on-year inflation, as measured by the Consumer Price Index (CPI), saw a notable uptick, reaching 5.9% in July 2023. This represents an increase from the 5.7% recorded in June and marks the first rise since October 2022.

The primary driver behind this increase in inflation was a sharp surge in inflation in Türkiye. However, when excluding Türkiye from the calculations, the OECD inflation rate for July is estimated to have remained broadly stable.

The report also highlights that while inflation declined in 26 out of 38 OECD countries, a substantial 17 of them experienced declines of more than 0.5 percentage points.

Energy inflation within the OECD remained negative, at -7.5%, following a -9.6% figure in June. In total, 30 OECD countries reported negative year-on-year energy inflation, with 22 of them witnessing declines relative to the previous month.

Food inflation continued its downward trend, matching the previous month’s pace, and recorded a rate of 9.2% in July. This represents the lowest level since February 2022, following a 10.1% figure in June. Meanwhile, inflation, excluding food and energy (core inflation), saw a slight increase from 6.6% in June to 6.7% in July.

The G7 countries reported stable year-on-year inflation at 3.9% in July. The United Kingdom observed the most significant decline, primarily due to a sharp decrease in energy inflation. Nevertheless, the United Kingdom continues to have the highest inflation rate among G7 nations. Inflation also decreased in Italy, France, and Germany, while Canada and the United States witnessed increases. However, the inflation rates in these two countries remained more than 2.5 percentage points below the average OECD rate. Japan reported stable headline inflation. Non-food and non-energy items remained the primary contributors to headline inflation in all G7 countries for July.

In the euro area, year-on-year inflation, measured by the Harmonised Index of Consumer Prices (HICP), continued to decline, albeit at a slower pace than in previous months. It reached 5.3% in July 2023, down from 5.5% in June. August 2023 estimates from Eurostat suggest stable inflation in the euro area, with some variability among member states. HICP inflation increased to 5.7% in France, while inflation estimates remained stable in Germany and declined in Italy. Energy deflation in the euro area was less pronounced in August compared to July, and core inflation slowed to 5.3% from 5.5% in July.

In the G20, year-on-year inflation increased to 5.8% in July 2023, up from 5.5% in June. India experienced its second consecutive month of inflation growth, and Brazil saw inflation rise after a year of continuous decrease. Conversely, headline inflation declined in Argentina, South Africa, Saudi Arabia, Indonesia, and China, where total inflation turned negative for the first time since February 2021.

This report underscores the evolving inflation landscape within the OECD and its member countries, reflecting various factors influencing consumer prices.

For more details and insights, you can refer to the OECD’s official report.