Inflation in the member countries of the Organization for Economic Co-operation and Development (OECD) slowed notably in May, driven by softer energy prices.
The annual inflation rate in the OECD area dipped to 2.1% in the year to May, from 2.5% in the year to April. This marked the lowest rate since January 2011 the Paris-based OECD noted.
The slowdown in the annual rate of inflation mainly reflected developments in energy prices (where inflation slowed to 2.0% in May, compared with 4.8% in April) and food prices (2.6%, compared with 3.1%), the OECD explained. Excluding food and energy, the OECD annual inflation rate slowed to 1.9% in May, compared with 2.0% in April.
Annual inflation decelerated in all G7 countries, it reported. Strong slowdowns were recorded in Canada (where inflation fell to 1.2% in May, compared with 2.0% in April) and the US (to 1.7%, down from 2.3%), the OECD noted. In both countries the slowdown mainly reflected a fall in energy prices for the first time since October 2009.
The inflation rate slowed more moderately in Germany, Japan, the United Kingdom, France and Italy.
The rate also decelerated in emerging markets, with China’s rate slipping to 3.0% in May, down from 3.4% in April, and slides in South Africa and Brazil. Inflation remained stable in India, Indonesia, and Russia.
On a month over month basis, consumer prices in the OECD area fell by 0.1% in May. They fell by 0.3% in Japan, by 0.2% in Germany, by 0.1% in Canada, France, the UK and the United States. And, they remained stable in Italy.