OECD reports 30-year high in inflation

Surge in prices fuelled by soaring energy prices and hyperinflationary conditions in one developing country

OECD reports 30-year high in inflation

In December, the OECD group of nations experienced levels of international inflation it hasn’t seen in 30 years, according to a new report.

The latest statistics from the OECD show inflation across member countries, measured based on consumer prices, rose to 6.6% in the 12 months to December 2021, the highest rate since July 1991. That’s compared to 5.9% in November, and just 1.2% in December 2020.

For 2021 as a whole, annual inflation in the OECD climbed to 4%, the fastest pace since 2000, in contrast to 1.4% in 2020.

“This increase was driven in part by a surge in annual inflation in Turkey (to 36.1% in December, after 21.3% in November),” the report said. Excluding Turkey, inflation in the OECD was a more moderate 5.6% in December, and 5.3%% in November.

Energy was also a major driver; in the 12-month period until December, energy prices soared by 25.6% in the OECD area. That was just slightly less severe than the 27.6% print for November, but a dramatic acceleration compared to 4.2% in December 2020.

For the whole of 2021, energy prices increased by 15.4%, the biggest burst in prices since 1981.

Food price inflation registered at a comparatively tame 6.8% in December 2021.

Excluding food and energy, year-on-year inflation in the OECD area rose to 4.6%, compared to 3.9% in November.

Collectively across the G7 nations, year-on-year inflation grew marginally to 5.6% in December compared to 5.4% November.

Inflation ran hottest in the United States, which saw CPI come rise to 7.0% in December from 6.8 percent in November. Canada’s CPI was little changed, from 4.7% to 4.8%, while the U.K. went from 4.6% to 4.8%.

Except for France, other G7 nations saw similar modest increases over the same period:

  • Italy (3.7% to 3.9%);
  • Japan (0.6% to 0.8%);
  • Germany (5.2% to 5.3%);
  • France (flat at 2.8%)