By : Wael Ameen
Year-on-year inflation in the OECD, as measured by the Consumer Price Index (CPI), decreased to 5.6% in October 2023 from 6.2% in September. This is the lowest level since October 2021, although a similar rate was briefly approached in June 2023 at 5.7% (Figures 1 and 2). Declines in inflation between September and October 2023 were registered in 28 OECD countries. By contrast, inflation increased by one percentage point or more in Greece, Czechia, and Costa Rica. Inflation rates were close to zero in Denmark, turning negative in the Netherlands and remained negative in Costa Rica despite its increase.
Food inflation in the OECD continued to slow rapidly, reaching 7.4% in October down from 8.1% in September. It declined in 32 OECD countries but still exceeded 10% in Türkiye, Iceland, Colombia, and the United Kingdom. Energy inflation in the OECD was negative in October. It decreased most sharply in Italy, the United Kingdom and Ireland, largely explained by the strong increase in the consumer price index for energy in October 2022 (i.e., base effect). Core inflation (inflation less food and energy) was broadly stable at 6.5% in October 2023.
In the G7, year-on-year inflation declined to 3.4% in October from 4.1% in September, reaching its lowest level since April 2021. Inflation declined in all G7 countries except in Japan. Italy registered the lowest year-on-year inflation rate among G7 countries, down from 5.3% in September to 1.7% in October. Non-food and non-energy items were the main contributors to headline inflation in most G7 countries in October (Figure 3). Food inflation and core inflation continued their downward trend. Energy prices have started to fall again in October, after having increased in September.
In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP) fell to 2.9% in October from 4.3% in September, with declines in food, energy, and core inflation. In November, Eurostat’s flash estimate points to a further decline in year-on-year inflation to 2.4%, with core inflation and energy inflation both estimated to have continued to decrease.
In the G20, year-on-year inflation declined to 5.7% in October 2023 from 6.1% in September. Inflation decreased in Brazil, and India, but increased in Argentina, South Africa, and Indonesia. It turned slightly negative again in China, having briefly been negative in June 2023. It was broadly stable in Saudi Arabia.
