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Weaker energy, food prices reduce inflation

The price of oil has hit a weak patch recently, largely owing to prospects that global economic growth might falter/AFP

PARIS, Sept 4 – Slower growth in energy and food prices despite some tough climate conditions trimmed 12-month inflation in advanced economies to 1.9 percent in July from 2.0 percent in June, the OECD said on Tuesday.

“This easing in the annual rate of inflation mainly reflects slower growth in energy and food prices,” a statement issued by the Organisation for Economic Cooperation and Development said.

Drought conditions in crop producing regions in the United States and the Black Sea region have raised concerns about possible spikes in food prices in the coming months.

A breakdown of the numbers for the 34-member OECD showed that energy prices rose by 0.7 percent in July on a 12-month basis, down from 1.4 percent in June, as weaker prospects for global growth reduced pressure on energy costs.

Food prices were 2.3 percent higher, “the lowest rate since September 2009,” down from 2.8 percent, the statement said.

“Excluding food and energy, the OECD annual inflation rate was unchanged at 1.8 percent in July,” it added.

Looking at individual countries, US inflation dropped to 1.4 percent from 1.7 percent, and reached minus 0.4 percent in Japan, from minus 0.2 percent.

In China, inflation stood at 1.8 percent in July, compared with 2.2 percent in June, while German prices gained 1.7 percent, a level that was unchanged.

In India the rate eased to 9.8 percent from 10.1 percent, and South Africa posted a rate of 5.0 percent, down from 5.6 percent.

In Brazil however, prices rose by 5.2 percent, from 4.9 percent, in Russia by 5.6 percent from 4.3 percent, and in Indonesia by 4.6 percent, from 4.5 percent, the OECD data showed.

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