OECD annual inflation slowed to 0.7% in May 2020, driven by energy prices; food prices inflation continued to rise

Annual inflation in the OECD area slowed to 0.7 % in May 2020, compared with 0.9 % in April and 1.7 % in March, on the back of the largest fall in energy prices since September 2009. Energy prices declined by a further (minus) 13.4 % in May, following the contraction of (minus) 12.2 % in April. By contrast, food price inflation picked up to 4.5 %, compared with 4.2 % in April, the largest annual increase since December 2011. Excluding food and energy, OECD inflation was stable at 1.6 % in May 2020.

Note: [1] Eurostat note: “Data collection for HICP has been affected by the COVID-19 crisis in all euro area countries. Eurostat and the Member States’ national statistical institutes have agreed a set of procedures to estimate prices that could not be collected due to mobility restrictions or closures of outlets. All information about these procedures is available on the Eurostat website section on inflation.”

In May 2020, among major economies, only France saw a (marginal) pick-up in annual inflation (to 0.4 %, from 0.3 %) while it was stable in Japan (at 0.1 %). Annual inflation slowed in Canada (to (minus) 0.4 %, from (minus) 0.2 % in April), Italy (to (minus) 0.2 %, from 0.0 %), Germany (to 0.6 %, from 0.9 %), the United Kingdom (to 0.7 %, from 0.9 %) and the United States (to 0.1 %, from 0.3 %).

Annual inflation in the Euro area, as measured by the HICP , also slowed (to 0.1%, from 0.3%). Excluding food and energy, annual inflation was stable at 0.9 %.

Among non-OECD G20 economies, annual inflation decreased in Argentina (to 43.4 %, from 45.6 %), China (to 2.4 %, from 3.3 %), Indonesia (to 2.0 %, from 2.7 %), Brazil (to 1.9 %, from 2.4 %), India (to 5.1 %, from 5.4 %), Saudi Arabia (to 1.1 %, from 1.3 %) and the Russian Federation (to 3.0 %, from 3.1 %). Annual inflation in the G20  area as a whole also decreased to 2.1 % compared with 2.4 % in April.

Notes

[1] HICP (Harmonised Indices of Consumer Prices) published by Eurostat.

[1] On 11 July 2017, the Argentinian Authorities started to publish a new national CPI (December 2016 = 100) covering the whole country. This officially reported CPI-series starts in December 2016, and has now been included in the G20 aggregate, from January 2018 onwards. The inclusion of the Argentinian CPI in the G-20 aggregate entailed a clear break in the series.

[1] Due to Covid-19 lockdown restrictions, Statistics South Africa postponed the publication of the May CPI to Wednesday 15 July 2020. As a consequence, inflation for the G20 area has been calculated excluding South Africa for May 2020 according to the methodology described in the methodological note on CPI for G20 area

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