OECD inflation stable at 4.7% in December 2024

Inflation across the Organisation for Economic Co-operation and Development (OECD) remained stable at 4.7 per cent in December 2024 compared with November, according to the latest Consumer Price Index (CPI) data. Headline inflation increased in 18 of the 38 OECD countries, with notable jumps of 0.7 percentage points (pp) or more in Latvia, Costa Rica, Hungary, Lithuania, and Japan. Conversely, inflation declined in eight countries, including Turkiye, which recorded the most significant drop of 2.7 pp, while it remained stable or broadly stable in 12 others.

A key driver of inflation in December was a sharp increase in OECD energy inflation, though this was partially offset by a slight decline in core inflation, which excludes food and energy. Overall, annual OECD inflation for 2024 stood at 5.2 per cent, a decline of 1.6 pp compared to 2023, approximately 4 pp below its 2022 peak but still more than double its 2019 level. Core inflation averaged 5.7 per cent, lower than in 2023, while energy inflation stood at 0.6 per cent, as per an OECD release.

In the Group of Seven (G7) area, inflation increased for the third consecutive month, reaching 2.8 per cent in December, up from 2.6 per cent in November. The largest rise was observed in Japan, where headline inflation surged to 3.6 per cent, its highest level since January 2023, following reductions in electricity and gas subsidies. Inflation also rose in Germany, the only G7 country where core inflation accelerated, as well as in the United States. Core inflation remained the dominant contributor to headline inflation in all G7 countries except Japan, where food and energy inflation combined to exert a greater impact.

The euro area saw a further rise in inflation, as measured by the Harmonised Index of Consumer Prices (HICP), which climbed to 2.4 per cent in December from 2.2 per cent in November. Energy inflation was near zero after four months of negative readings, while core inflation remained broadly stable. According to Eurostat’s flash estimate, year-on-year inflation in the euro area was broadly stable at 2.5 per cent in January 2025, with core inflation holding steady and energy inflation showing an uptick.

In the Group of 20 (G20), inflation declined to 5.1 per cent in December from 5.7 per cent in November, marking its lowest level since September 2021. Argentina saw a significant drop in headline inflation in December, though prices remained more than twice as high as in December 2023. Inflation was broadly stable in Brazil, Indonesia, Saudi Arabia, South Africa, and China, with China’s inflation standing close to zero at 0.1 per cent.

Fibre2Fashion News Desk (HU)