OECD annual inflation continues upward, reaching 4.3 % in August 2021 driven by energy and food prices

Inflation in the OECD area rose to 4.3 % in the 12 months to August 2021, compared with 4.2 % in July, continuing the upward trend beginning in December 2020. In the Euro Area, annual inflation picked up strongly to 3.0 % in August 2021, from 2.2 % in July, but remained lower than in the OECD area as a whole, particularly compared with the United States, where annual inflation stood at 5.3 % for the same period.

Energy prices in the OECD area rose at a faster pace in August (18.0 %) than in July (17.4 %) reaching the highest rate since September 2008. Food price inflation also increased sharply to 3.6 %, compared with 3.1 % in July. Excluding food and energy, OECD annual inflation remained stable at 3.1 % for the third consecutive month.

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In August, annual inflation increased sharply in the United Kingdom (to 3.0 %, from 2.1 % in July), France (to 1.9 %, from 1.2 %), and Canada (to 4.1 %, from 3.7 %) but only slightly in Germany (to 3.9 %, from 3.8 %) and Italy (to 2.0 %, from 1.9 %). Annual inflation eased slightly, but remained high in the United States (at 5.3 %, after 5.4 % in July). The new Japanese 2020-base CPI continued to show overall price deflation in August (minus 0.4 %), with prices falling at a slightly faster pace than in July (minus 0.3 %).

In the Euro Area, overall inflation (as measured by the HICP ) rose sharply to 3.0 % in August 2021, compared with 2.2 % in July, driven by developments in France, Germany and Italy – the latter two countries experienced, a much more pronounced acceleration in HICP than in CPI.  Excluding food and energy, Euro Area inflation jumped to 1.6 % compared with 0.7 % in July, largely reflecting increases in the price of non-energy industrial goods, in particular the prices of clothing and footwear (to 3.6 %, from (minus) 3.3 %). Eurostat’s flash estimate for the euro area in September points to both annual inflation and inflation excluding food and energy picking up to 3.4 % and 1.9 % respectively.

Annual inflation in the G20  area decreased slightly to 4.5 % in August 2021, compared with 4.6 % in July. Among non-OECD G20 economies, annual inflation increased in Brazil (to 9.7 %, from 9.0 %), South Africa (to 5.1 %, from 4.7 %), the Russian Federation (to 6.7 %, from 6.5 %), and Indonesia (to 1.6 %, from 1.5 %). On the other hand, annual inflation was broadly stable in Argentina (at 51.4 % after nine consecutive months of increases), and decreased in India (to 4.8 %, from 5.3 %), China (to 0.8 %, from 1.0 %), and Saudi Arabia (to 0.3 %, from 0.4 %).

Due to measures put in place by governments to reduce the spread of the Coronavirus (Covid-19), many statistical agencies are facing unprecedented collection, compilation and methodological challenges to develop indicators across a number of domains. To address these challenges, the statistical community is developing conceptual and practical guidelines to help ensure the continued delivery of timely and reliable statistics. However, in some cases, there will inevitably be an impact on quality and, as such, the statistics included in this press release may be subject to larger than normal uncertainty.