Inflation Moderation Slows In July

July was a mixed month for global inflation after moderating for almost a year. We have started to see disinflationary factors turn up again but remain negative. OECD price pressures continue to be well above Asia’s consistent with the latter’s central banks on hold while most advanced central banks retain a tightening bias.

• OECD headline CPI rose to 5.9% from 5.7% predominantly due to the US and core to 6.8% from 6.6% with it being sticky in a number of countries, including the euro area.
• Non-Japan Asian CPI rose to 2% in July from a low 1.7% in June, which was the lowest since early 2021. The uptick was due to higher inflation in India because of rising food prices, the rest of the region saw it moderate. But increasing rice prices and the impact of El Nino on food are a concern in a number of countries. Core ticked up to 1.4% from 1.2% due to China, but remains not only contained but also very low. Excluding China it eased 0.3pp to 3.1%, the lowest since April 2022.

Global core CPI y/y%

Source: MNI - Market News/Refinitiv/IMF