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OECD inflation falls to 4.7% in August, largely driven by Turkey

OECD inflation falls to 4.7% in August, largely driven by Turkey

October 4, 2024

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Year-on-year inflation in the OECD (Organisation for Economic Co-operation and Development), as measured by the Consumer Price Index (CPI), fell to 4.7% in August 2024 from 5.4% in July.

The fall was driven to a large extent by a decline of about 10% in Turkey’s inflation, which nevertheless remained above 50%.

Declines were also observed in 24 of 38 of the OECD countries. Excluding Turkey, inflation in the OECD area is estimated to have decreased more moderately, to 2.7% in August from 3.0% in July. 

Inflation rose in nine OECD countries and was stable or broadly stable in five. Headline inflation stood at or below 2% in 16 countries in August, while only nine countries reached that in July.

Year-on-year OECD energy inflation fell significantly to minus 0.1% in August from 3.3% in July, with declines in 31 OECD countries. Year-on-year food inflation and core inflation (inflation less food and energy) declined in the OECD area, mainly due to sharp falls in Turkey. Core inflation fell in 9 countries while it rose in 10 and was stable or broadly stable in 19.

In the G7, year-on-year headline inflation eased to 2.4% in August from 2.7% in July, driven by energy prices. Headline inflation fell in all G7 countries except Japan, where it increased, and in the UK, where headline inflation remained stable.

Year-on-year headline inflation reached low levels, which were last seen in 2021 in Canada and the US (February 2021), in Germany (March 2021), and in France (July 2021).

Energy prices fell markedly, while G7 food and core inflation rates were stable. Core inflation remained the main contributor to headline inflation in all G7 countries except for Japan, where the combined contribution of food and energy inflation exceeded that of core inflation.

In the euro area, year-on-year inflation, as measured by the Harmonised Index of Consumer Prices (HICP), declined to 2.2% in August from 2.6% in July. Energy inflation declined rapidly to minus 3.0% in August after 1.2% in July, while food and core inflation remained broadly stable.

In September 2024, according to Eurostat’s flash estimate, year-on-year headline inflation continued to decline in the euro area, reaching 1.8%. Energy inflation in the euro area is estimated to have further declined in September, while core inflation is estimated to have been broadly stable.

In the G20, year-on-year inflation fell to 6.3% in August from 6.8% in July. Headline inflation in Argentina, though declining, continued to exceed 230% (among the worst in the world).

Headline year-on-year inflation also fell in Brazil after three consecutive monthly rises and in South Africa. Headline inflation increased in India while it remained stable or broadly stable in China, Indonesia, and Saudi Arabia.