OECD annual inflation slows to 4% in May, lowest in 4 years

Annual consumer inflation in the Organization for Economic Cooperation and Development (OECD) area eased to 4% in May from 4.2% in April, according to data released on Thursday.

This was the slowest rate since June 2021 and represented a drop of 6.7 percentage points from the peak seen in October 2022.

Inflation declined in 15 of the 38 OECD countries and remained stable or broadly unchanged in 14. However, nine OECD countries saw inflation rise, with notable increases exceeding 0.5 percentage points in the Czech Republic, Greece, Mexico, and Norway.

OECD energy inflation was stable at minus 0.3% in May, while food inflation was at 4.6%. "However, cumulative increases in both food and energy price levels since December 2019 exceed 40%," the OECD said.

Core inflation, which excludes food and energy, slowed to 4.4% in the month from 4.6%.

In the Group of Seven (G7), annual inflation remained steady for the third consecutive month at 2.4%. In Italy, inflation slowed due to a 0.3 percentage point fall in core inflation and a drop in energy prices.

Across the G7 countries, core inflation remained the primary driver of headline inflation, except in Japan, where the combined contribution of food and energy inflation exceeded that of core inflation.

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

Consumer prices fell in Brazil and Indonesia, while they remained stable or broadly stable in China, India, Saudi Arabia, and South Africa.

In Argentina, inflation continued to decline, reaching 43.5%, six times lower than a year earlier.

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

This decline was driven by a slowdown in core inflation to 2.3% in May, its lowest level since January 2022, including a 0.8 percentage point fall 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.