OECD Inflation Slumps to 4 Percent in May

(MENAFN) Consumer inflation in the Organization for Economic Cooperation and Development (OECD) area moderated to 4% in May, a decrease from April's 4.2%, as reported in new data released on Thursday.

This marks the lowest inflation rate since June 2021 and signifies a substantial drop of 6.7 percentage points from the record high of 10.7% seen in October 2022.

Inflation levels dropped in 15 of the 38 OECD member countries, while 14 nations experienced stable or relatively unchanged rates. In contrast, nine countries saw inflation rise, with the most significant increases—surpassing 0.5 percentage points—reported in the Czech Republic, Greece, Mexico, and Norway.

Energy inflation across the OECD remained steady at -0.3% in May, whereas food inflation registered at 4.6%. The OECD highlighted, "However, cumulative increases in both food and energy price levels since December 2019 exceed 40%."

Core inflation, which excludes food and energy costs, decreased slightly to 4.4% from 4.6% in April.

Within the Group of Seven (G7) countries, inflation remained unchanged for the third straight month at 2.4%. Italy saw a decline, largely driven by a 0.3 percentage point reduction in core inflation and a drop in energy prices.

Across the G7, core inflation was the main contributor to overall inflation, except in Japan, where the combined impact of rising food and energy prices outweighed core inflation's influence.

In the Group of 20 (G20), inflation eased to 3.9% in May, down from 4.1% in April.

Notably, consumer prices fell in Brazil and Indonesia, while China, India, Saudi Arabia, and South Africa saw inflation remain stable. In Argentina, inflation continued its downward trajectory, dipping to 43.5%—a sharp decline from the same time last year.

In the eurozone, annual inflation, as measured by the Harmonized Index of Consumer Prices (HICP), fell to 1.9% in May, down from 2.2% in April.

This reduction was largely due to a slowdown in core inflation, which eased to 2.3% in May, its lowest since January 2022. A key factor was a 0.8 percentage point drop in services inflation.

"While food inflation continued to rise in the euro area, energy prices fell year-on-year at the same pace as in April. In June 2025, according to Eurostat’s flash estimate, year-on-year headline inflation in the euro area remained broadly stable at 2.0%, with a slowing decline in energy prices, while core inflation is estimated to have remained stable," the OECD added.

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