The consumer price inflation rate in July was 2.8%. It was the first time the rate had eased since the outbreak of the Middle East war. The slowdown was driven by petroleum product prices, whose increase decelerated to 15.5% from 24.7% a month earlier.
According to the July consumer price trends that the Ministry of Data and Statistics (MODS) released on the 4th, last month's consumer price index was 119.77 (2020=100), up 2.8% from a year earlier. After accelerating following the Middle East war—2.2% in March, 2.6% in April, 3.1% in May, and 3.2% in June—the rate eased for the first time last month.
An official at the Ministry of Data and Statistics (MODS) said, "The deceleration reflects a moderation in petroleum product price gains due to the downward stabilization of international oil prices." The official added, "Prices of agricultural, livestock, and fisheries products also saw smaller increases thanks to higher shipment volumes of key items and government discount support."
Last month, petroleum product prices rose 15.5% from a year earlier. The gasoline increase narrowed to 12.6% last month from 23.1% in June. Diesel slowed to 21.5% from 33.7%, and kerosene to 20.5% from 23.1%.
International oil prices topped $100 a barrel in March–May amid heightened geopolitical uncertainty from the Middle East war, then steadily fell after the United States and Iran reached a cease-fire agreement in June, briefly dropping into the $60 range last month. Recently, as tensions have flared again, they have climbed back into the $80 range.
Industrial products, including petroleum products, also saw their increase narrow to 3.7% from 4.4% a month earlier. Portable multimedia devices such as smartphones rose 22.5% due to factors including higher factory prices stemming from semiconductor price increases. Processed foods rose only 1.0%. Electricity, gas, and water rose 0.4%.
Last month, prices of agricultural, livestock, and fisheries products rose 0.9%, with the increase slowing from 3.2% a month earlier. Green onions climbed 18.3%, with the rate narrowing from 37.1% in the previous month. The increase in rice eased to 7.9% from 11.7%, and eggs to 7.5% from 10.3%.
Services, referring to personal services such as rent, public services, and dining out, rose 2.6%. Public services rose 1.4%, and personal services increased 3.5%. An official at the Ministry of Data and Statistics (MODS) said, "Personal services expanded by 0.1 percentage point from the previous month due to increased travel demand during the vacation season."
The living cost index, composed mainly of frequently purchased items and reflecting perceived inflation, rose 2.5%, down 0.9 percentage point from 3.4% a month earlier. The fresh food index, which reflects "table prices," fell 2.3%.
The index excluding food and energy, a core inflation metric used by the Organization for Economic Cooperation and Development (OECD), rose 2.6%, with the increase 0.1 percentage point larger than a month earlier. Another core inflation metric, the index excluding agricultural and petroleum products, rose 2.5%.