OECD annual inflation surges to 3.8 % in May 2021

Year-on-year inflation in the OECD area increased to 3.8 % in May 2021, compared with 3.3 % in April. Energy prices rose by 18.6 % in May, the highest rate since September 2008, compared with 16.3 % in April. Nevertheless, food price inflation continued to slow to 1.4 %, compared with 1.6 % in April. Developments in energy and food prices are largely related to base year effects and to the impact of the COVID-19 pandemic a year ago. OECD annual inflation excluding food and energy also increased significantly to 2.9 % in May, compared with 2.4 % in April, the highest rate since August 2002.

In May 2021, annual inflation increased in all G7 countries except in Japan where overall price deflation continued in May (minus 0.1 %) but at a slower pace than in April (minus 0.4 %). It increased sharply in the United States (to 5.0 %, from 4.2 % in April), Germany (to 2.5 %, from 2.0 %), and the United Kingdom (to 2.1 %, from 1.6 %). It also increased, but more moderately, in Canada (to 3.6 %, from 3.4 %), France (to 1.4 %, from 1.2 %) and Italy (to 1.3 %, from 1.1 %).

In the Euro Area, overall inflation (as measured by the HICP ) increased to 2.0 % in May 2021, compared with 1.6 % in April. Excluding food and energy, euro area inflation increased to 1.0 %, compared with 0.7 % in April. Eurostat’s flash estimate for the Euro Area in June points to a slight moderation of both annual inflation and inflation excluding food and energy to 1.9 % and 0.9 % respectively.

Note: 1 HICP (Harmonised Indices of Consumer Prices) published by Eurostat.

Annual inflation in the G20  area as a whole increased to 4.3 % in May 2021, compared with 3.8 % in April. Annual inflation increased in all non-OECD G20 economies, markedly in Argentina (to 48.8 %, from 46.3 %), the Russian Federation (to 6.0 %, from 5.5 %) and Brazil (to 8.1 %, from 6.8 %), and more moderately in South Africa (to 5.2 %, from 4.5 %), Saudi Arabia (to 5.7 %, from 5.3 %), China (to 1.3 %, from 0.9 %), Indonesia (to 1.7 %, from 1.4 %) and India (to 5.3 %, from 5.1 %).

Note: [1]2 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.

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