The Blubber

Here is the full OECD breakdown:

Year-on-year inflation in the OECD, as measured by the Consumer Price Index (CPI), dropped to 6.5% in May 2023, down from 7.4% in April 2023 toreach its lowest level since December 2021 (Figures 1 and 3). Between April and May 2023, inflation declined in all OECD countries except in the Netherlands, Norway, and the United Kingdom. Across OECD countries, inflation rates ranged from less than 3% in Costa Rica, Greece and Denmark, to more than 20% in Hungary and Türkiye.

Continuing the trend of previous months, OECD inflation less food and energy (core inflation) declined at a much slower pace than headline inflation and reached 6.9% in May 2023, following 7.1% in April. Services inflation, estimated based on information available for 33 OECD countries, declined in 18 countries, compared to 13 countries in April. On average it moderated to 5.7% in May from 6.0% in April, in year-on-year terms.

Energy inflation in the OECD plunged to minus 5.1% in May year-on-year, from 0.7% in April. It was negative in 16 OECD countries, but remained above 10% in Latvia, Italy, the Czech Republic, Colombia and Hungary. OECD year-on-year food inflation continued to slow, reaching 11.0% in May 2023, down from 12.1% in April. Declines in food inflation were registered in 34 OECD countries.

Year-on-year inflation in the G7 fell to 4.6% in May 2023, from 5.4% in April, reaching its lowest level since September 2021. Inflation declined in all G7 countries, apart from the United Kingdom, where inflation edged up, as core inflation continued to rise. The lowest inflation rates among G7 countries were registered in Japan and Canada, both below 3.5%. Food and energy inflation remained the main contributors to headline inflation in Italy, while core inflation was the main inflation driver in France, Germany, Japan, the United Kingdom and the United States (Figure 2).

In the euro area, year-on-year inflation, as measured by the Harmonised Index of Consumer Prices (HICP), dropped to 6.1% in May 2023, from 7.0% in April. Eurostat’s flash estimate for June 2023 points to a further decline in year-on-year inflation in the euro area, to 5.5 %. This masks significant variability across member states, with inflation measured by HICP surging to 6.8% in Germany but below the 2% monetary policy target rate in Spain. Energy inflation in the euro area is estimated to have dropped again in June while core inflation is estimated to have risen slightly.

In the G20, year-on-year inflation declined to 5.9% in May 2023, from 6.5% in April. Outside the OECD, inflation decreased in Brazil, India, Indonesia and South Africa, but increased in Argentina. It was broadly stable in China and Saudi Arabia.