Year-on-year inflation in the OECD, as measured by the Consumer Price Index (CPI), rose to 5.9% in July 2023, after 5.7% in June, the first increase since October 2022 (Figures 1 and 3). This increase was mainly driven by a sharp rise in inflation in Türkiye. Excluding Türkiye, OECD inflation is estimated to have been broadly stable in July. Falls in inflation were recorded in 26 of 38 OECD countries, of which 17 experienced declines above 0.5 percentage points.

Energy inflation in the OECD remained negative, at minus 7.5%, after minus 9.6% in June. It was negative in year-on-year terms in 30 OECD countries, and it declined in 22 countries relative to the previous month. Food inflation continued to fall at the same pace as in the previous month, reaching 9.2% in July, its lowest level since February 2022, after 10.1% in June. Inflation less food and energy (core inflation) rose slightly, to 6.7% from 6.6% in June.

Year-on-year inflation in the G7 was stable at 3.9% in July. The largest decline was observed in the United Kingdom where energy inflation fell sharply. However, the inflation rate in the United Kingdom is still the highest rate among G7 countries. Headline inflation also declined in Italy, France and Germany. By contrast, headline inflation increased in Canada and the United States, nevertheless headline inflation rates remained more than 2.5 percentage points below the average OECD rate. Headline inflation was stable in Japan. Non-food and non-energy items remained the main contributors to headline inflation in all G7 countries in July.

In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP), continued to decline, albeit at a slower pace than in the previous two months, reaching 5.3% in July 2023, after 5.5% in June. In August 2023, according to Eurostat’s flash estimate, inflation is estimated to have been stable in the euro area. This masks variability across member states. HICP inflation is estimated to have increased to 5.7% in France after 5.1% in July with a sharp rise in energy inflation, while headline inflation estimates have been broadly stable in Germany and declining in Italy. Energy deflation in the euro area is estimated to have been less pronounced in August than in July and core inflation is estimated to have slowed to 5.3%, after 5.5% in July.

In the G20, year-on-year inflation increased, to 5.8% in July 2023, from 5.5% in June. Inflation increased in India for the second consecutive month and in Brazil after one year of continuing decrease. By contrast, headline inflation declined in Argentina, South Africa, Saudi Arabia, Indonesia and China, where total inflation was negative for the first time since February 2021.