Driven by falling energy prices, OECD headline inflation slows to 4.4% in September 2024

Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) slowed to 4.4% in September 2024 from 4.7% in August. Inflation declined in 27 of 38 OECD countries, rose in 6, and was stable or broadly stable in 5. Headline inflation stood at or below 2% in 17 countries in September, similar to the number in August (16). Inflation in Türkiye remained above 49%. Despite the recent slowdown in OECD headline inflation, average price levels across the OECD as a whole were approximately 30% higher in September 2024 than they were in December 2019, prior to the onset of the COVID pandemic.

Year-on-year OECD energy inflation remained negative, falling to minus 2.2% in September from minus 0.4% in August. Energy inflation declined in 34 OECD countries, 17 of which already had negative energy inflation in August. Year-on-year food inflation and core inflation (inflation less food and energy) remained broadly stable.

In the G7, year-on-year headline inflation slowed to 2.2% in September from 2.4% in August, driven by falling energy prices. Headline inflation remained broadly stable in the United States and fell in all other G7 countries. The largest decline was observed in France, where energy prices fell sharply while core inflation decelerated due to a slowdown in services price inflation. Food inflation in the G7 increased for the first time since October 2022, driven by uptick in Italy, the United Kingdom, and the United States. 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 was equal to that of core inflation.

In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP) declined to 1.7% in September from 2.2% in August, dipping below 2% for the first time since June 2021. At minus 6.1%, the year-on-year decline in energy prices was almost twice as steep as in August. Food and core inflation remained broadly stable in the euro area. In October 2024, Eurostat’s flash estimate pointed to an increase in euro area year-on-year inflation to 2.0%, with a slowing decline in energy prices, while core inflation is estimated to have remained stable.

In the G20, year-on-year inflation slowed to 6.0% in September from 6.2% in August. Headline inflation in Argentina, though declining for the fifth consecutive month, continued to exceed 200%. Headline year-on-year inflation also fell in South Africa, Indonesia, and China. Headline inflation increased in India for the second consecutive month, reaching 4.2%. It also increased in Brazil and remained broadly stable in Saudi Arabia.

Source: OECD
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