Global Inflation Trends: July 2025 Review
Global inflation trends in July 2025 present a mixed picture, with stable or rising inflation rates in various countries. The U.S. Consumer Price Index (CPI) rose by 2.7%, slightly lower than expected, but the core index exceeded expectations at 3.1%. Meanwhile, Italy's inflation held steady at 1.7% while the price of goods accelerated to +3.2%. On the other hand, inflation in Argentina remained below 2% for the third consecutive month.
Background and Context
Amidst President Trump's ongoing tariff shakeup, the consumer costs have been impacted, leading to a rise in the Consumer Price Index (CPI) in the U.S. However, contrary to the market expectations of an acceleration, U.S. inflation remained stable in July, driven by the decrease in oil prices, which were down by -9.5% year on year.
Key Developments
As reported by ANSA, Italy's inflation was stable due to the opposing dynamics of prices of various aggregates. This stability, however, is contrasted by an increase in the shopping cart to +3.2%. On the other hand, Clarin revealed that the general IPC in Argentina would be below 2% for the third consecutive month, despite the rise in the dollar in July.
On the American front, The New York Times noted an expected uptick in inflation reflected by the CPI as companies increase prices as a result of Trump’s tariffs. This was confirmed by The Guardian, which reported that prices were 2.7% higher in July compared to the same period in the previous year.
Implications and Reactions
Trump's tariff policies have reverberated through global markets, particularly affecting European pharmaceutical companies. As reported by The Guardian, shares in these companies dipped to a three-month low after Trump repeated threats to introduce tariffs on drug imports.
However, Folha de S.Paulo noted that the U.S. dollar fell in initial trading on Tuesday, as investors awaited the government's contingency plan for businesses affected by the U.S. tariffs. This suggests that the market is still adjusting to the new economic reality.
Conclusion
July's inflation data reflects the ongoing impact of U.S. tariff policies and other global economic activities. While some countries like Italy and the U.S. are experiencing a steady or slightly increased inflation rate, others like Argentina are witnessing a sustained period of low inflation. While it is yet to be seen how these trends will evolve, the global market continues to adjust to these shifting dynamics. Observers will be keenly watching the inflation data for August and the potential impacts of any further tariff impositions by the U.S.