Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) fell slightly to 9.2% in January 2023, down from 9.4% in December. Declines in inflation between December 2022 and January 2023 were recorded in half of the OECD countries, compared to two-thirds between November and December 2022. The highest inflation rates were recorded in Hungary, Latvia, Lithuania and Turkiye (all remaining above 20%).

After the peak observed in June 2022, energy inflation continued to fall in the OECD, albeit at a slower pace than the previous month. It reached 16.4% in January 2023, its lowest level since March 2021, down from 18.2% in December 2022. The fall in energy inflation stemmed partly from shifting policy in the Netherlands (introduction of a price cap on energy) and Italy (decrease of regulated energy products prices). In Belgium, Denmark, Italy and Turkiye, the deceleration in energy prices in January 2023 was largely explained by the strong increase in the consumer price index for energy in January 2022 (i.e. base effect). Food inflation in the OECD declined to 15.2%, from 15.6% in December 2022, while inflation excluding food and energy was stable.

In January 2023, inflation was broadly stable in G7 as a whole. It increased in Germany, Japan and, to a lesser extent, in France, while it was broadly stable in the United States. Italy recorded a marked decline, while Canada and the United Kingdom recorded meaningful but less substantial falls. Food and energy inflation continued to be the main contributors to headline inflation in France, Italy and Japan, while inflation excluding food and energy was the main driver in Canada and the United States. In Germany and the United Kingdom, both components contributed almost equally to headline inflation (Figure 2).

In the euro area, year-on-year inflation as measured by the Harmonised Index of Consumer Prices (HICP) fell to 8.7% in January 2023, from 9.2% in December 2022. Energy inflation continued to fall, while food inflation as well as inflation excluding food and energy both increased slightly. Eurostat's flash estimate for February 2023 points to a further decrease in year-on-year inflation in the euro area, with energy inflation falling significantly while inflation excluding food and energy slightly increased.

In the G20, year-on-year inflation was broadly stable, reaching 8.4% in January 2023. Inflation decreased in Indonesia and South Africa, but increased in Argentina, China and India. It was broadly stable in Brazil and Saudi Arabia.

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