Consumer Prices, OECD – Updated: 7 February 2023

OECD inflation slows further to 9.4% in December 2022

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07 Feb 2023 – Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) slowed further to 9.4% in December 2022, down from its October 2022 peak (10.8%) and its lowest level since April 2022 (Figures 1 and 3). Declines in inflation between November and December were recorded in 25 of 38 OECD countries. Double-digit inflation was recorded in 15 OECD countries in December 2022, with the highest inflation rates recorded in Hungary, Latvia, Lithuania and Türkiye (all above 20%). OECD inflation in 2022 was more than double its 2021 level (9.6% compared with 4.0%), reaching its highest annual average rate since 1988.

After the peak observed in June 2022, energy inflation continued to fall sharply in most OECD countries, down from 23.8% in November to 18.4% in December, hitting its lowest level since August 2021. Food inflation and inflation excluding food and energy also decreased, to 15.6% and 7.2 % respectively, partially driven by pronounced falls in Türkiye.

In December, inflation declined in all G7 countries except Japan. The largest decrease was observed in Germany, reflecting a one-off subsidy on gas bills. Food and energy inflation continued to be the main contributors to headline inflation in France, Germany, Italy and Japan, while inflation excluding food and energy was the main driver in Canada, the United Kingdom and the United States (Figure 2).

In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP) fell to 9.2% in December, from 10.1% in November. Energy inflation continued to fall, but inflation excluding food and energy kept increasing in December. Eurostat’s flash estimate for January 2023 points to a further decrease in year-on-year inflation in the euro area, to 8.5%, with energy inflation falling significantly and inflation excluding food and energy remaining stable.

In the G20, year-on-year inflation fell to 8.5% in December, from 9.0% in November. Outside the OECD, year-on-year inflation decreased in Brazil and South Africa, but increased in Argentina, China, India, Indonesia and Saudi Arabia.

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