Inflation in the OECD area rose to 6.6 % in the 12 months to December 2021, compared with 5.9 % in November, and just 1.2 % in December 2020, reaching its highest rate since July 1991. This increase was driven in part by a surge in annual inflation in Turkey (to 36.1 % in December, after 21.3 % in November). Excluding Turkey, inflation in the OECD area increased more moderately (to 5.6 %, after 5.3 % in November).
Energy prices soared by 25.6 % in the OECD area in the 12 months to December 2021, two percentage points (p.p.) lower than November’s 27.6 %, but high compared with 4.2 % in December 2020. Food price inflation in the OECD area picked up strongly to 6.8 % in December, compared with 5.5 % in November and 3.2 % in December 2020. Excluding food and energy, OECD year-on-year inflation also rose sharply, to 4.6 %, compared with 3.9 % in November, and contributed significantly to headline inflation in a number of large economies.
For 2021 as a whole, annual inflation in the OECD rose to 4.0 %, compared with 1.4% in 2020, the highest annual average rate since 2000. Energy prices increased by 15.4 %, the highest rate since 1981. By comparison, they had decreased by 6.5% in 2020. Excluding food and energy, annual inflation rose to 2.9 %, compared with 1.8 % in 2020.
In December, year-on-year inflation increased moderately in most G7 countries as compared with November. It increased by 0.2 percentage point in the United States (to 7.0 %, from 6.8 % in November), the United Kingdom (to 4.8 %, from 4.6 %), Italy (to 3.9% , from 3.7 %), and Japan (to 0.8 %, from 0.6 %), and by only 0.1 percentage point in Germany (to 5.3 %, from 5.2 %) and Canada (to 4.8 %, from 4.7 %). It was stable in France (at 2.8 %).
Inflation excluding food and energy was the main contributor to overall inflation in the United States, the United Kingdom, Germany, and Canada where it contributed by 4.7, 3.5, 3.0 and 2.6 p.p., respectively. Nevertheless, energy had a significant contribution to overall inflation in all G7 countries, ranging from 1.2 p.p. in the United Kingdom to 1.8 p.p. in the United States, and was the main contributor to overall inflation in France.
While food price inflation increased in all G7 countries, its contributions to overall inflation remained limited, ranging from 0.2 p.p. in France to 0.7 p.p. in Canada.
In the Euro Area, overall inflation (as measured by the HICP) rose slightly to 5.0 % in December 2021, compared with 4.9 % in November, mainly driven by developments in Germany, France, Italy and Spain. Excluding food and energy, Euro Area inflation was stable at 2.6 %. Eurostat’s flash estimate for the euro area in January 2022 points to year-on-year inflation rising by a record 5.1% above expectations. Inflation excluding food and energy slowed to 2.3%, after 2.6% in December.
Year-on-year inflation in the G20 area increased to 6.1% in December 2021, compared with 5.9% in November. Among non-OECD G20 economies, year-on-year inflation increased in India (to 5.6 %, from 4.8 %), South Africa (to 5.9 %, from 5.5 ), Indonesia (to 1.9 %, from 1.7 %) and Saudi Arabia (to 1.2 %, from 1.1 %). By contrast, inflation was stable in the Russian Federation (at 8.4 %) while it decreased in Argentina (to 50.9 %, from 51.2 %), Brazil (to 10.1 %, from 10.7 %) and China (to 1.5 %, from 2.3 %).
Table 3 Consumer Prices, all items food, energy and all items excluding food and energy, selected countries
 HICP (Harmonised Index of Consumer Prices) published by Eurostat.