Food inflation in OECD countries, at its highest level in almost 50 years

The trajectory of food inflation among the member countries of the Organization for Economic Cooperation and Development (OECD) has reached levels not seen in almost five decades.

According to the Organization, during October, 33 of the 39 member countries registered double-digit variations in annual food inflation, where the average reached an annual fluctuation of 16.1 percent.

With this variation are added 21 consecutive months of increases in the register of food inflation in the OECD countries.

One of the 33 countries that reached a double-digit annual fluctuation in food inflation in October was Mexico, which registered an annual variation of 14.5%.

Information collected by the OECD shows that among this group of countries, those who presented the highest variations in food inflation were: Turkey, with a variation of 99% per year; Hungary, which reached a variation of 42.9%, also at 12 months, and Lithuania, which reached a fluctuation of 33.7 percent.

The contrast is marked by Israel, which presented the lowest fluctuation in food prices among the countries in the group, which is 4% per year, as well as Switzerland, which registered a 12-month fluctuation of 4.2% in food prices.

Experts from the Economic Commission for Latin America and the Caribbean (Cepal), the Food and Agriculture Organization of the United Nations (FAO) and the World Food Program (WFP) agreed that the transportation, war, and climate change have been the engines of this acceleration in food prices.

An index prepared by the Food and Agriculture Organization of the United Nations (FAO) shows that food prices registered a second consecutive month of deceleration in November. The OECD comparison is for October, therefore it would be the first month in which the FAO detected a slowdown in food prices.

Energetics continue to moderate

According to the organization’s experts, when making the comparison based on energy prices, Mexico remains the country with the lowest annual variation, corresponding to 3.2% per year.

With this record, Mexico was far from the OECD average, which was 28.1%, also at 12 months. The deputy governor of Banco de México, Jonathan Heath, explained that a part of the inflationary containment in Mexico has materialized due to energy subsidies. He has even estimated that without the gasoline subsidy, inflation today would be in double digits, close to 11 percent.

The entity’s experts highlighted that energy inflation continued to slow down for the fifth consecutive month in the group average, but it remains with fluctuations of more than 10% in 35 of the 39 OECD countries.

In its Quarterly Report, Banco de México pointed out that in the third quarter, some world economies have moderated the pressures derived from energy prices. However, he pointed out that inflation in emerging economies continues to be well above the target set by their central banks, with the exception of China.

According to the OECD comparison, the extreme of Mexico in energy prices was presented by Turkey with an annual variation of 137.1 percent.

Of the 14 most manageable

According to the OECD comparison, there are 19 member countries of the 39 that registered double-digit annual headline inflation in October.

Among them, Turkey registered 85% annual fluctuations in its general inflation, while Lithuania registered an annual variation of 23.6 percent.

General inflation in Mexico, recorded by the OECD at 8.4%, was one of 14 in single digits and is far from the organization’s average of 10.7 percent annually.

In October, inflation in the United States began to separate from that in Mexico.

The first economy in the world registered an annual variation of 7.7%, which is below the OECD average and the fluctuation reached by Mexican inflation.

ymorales@eleconomista.com.mx