Falling energy prices push OECD annual inflation down to 0.5% in January 2015

Annual inflation in the OECD area slowed to 0.5% in the year to January 2015, down from 1.1% in the year to December. This sharp decrease was caused by further falls in energy prices which declined by 12.0% in the year to January, compared with a decline of 6.3% in the year to December. Food price inflation slowed slightly to 2.3% in the year to January, down from 2.5% in the year to December. Excluding food and energy, the OECD annual inflation rate slowed marginally to 1.7% in January, compared with 1.8% in December.

Annual inflation continued to slow in all major OECD economies in January 2015, except Japan, where it remained stable (at 2.4%). Consumer prices fell for the first time since 2009 in the United States (by -0.1%), Germany (-0.6%) and France (-0.4%). Consumer prices also fell in Italy (-0.6%). Annual inflation slowed in Canada (to 1.0%, down from 1.5%) and in the United Kingdom (to 0.3%, down from 0.5%).

 

In the euro area, consumer prices (as measured by the HICP) fell by -0.6% in January 2015. Inflation excluding food and energy slowed to 0.6%, down from 0.8% in the year to December. However, Eurostat's flash estimate for February 2015 points to a decline of prices by 0.3%.

Annual inflation in the G20 area was 2.5% in January 2015. The G20 CPI aggregate reflects diverging patterns among the world's largest economies. Annual inflation further increased in the Russian Federation (to 14.9%) and to a lesser extent in India (to 7.2%) and Brazil (to 7.1%). On the other hand, annual inflation slowed in China (to 0.8%), Indonesia (to 7.0%), South Africa (to 4.4%) and Saudi Arabia (to 2.2%).

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