You thought inflation’s high in India? Data shows at least 100 countries doing worse

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Representational image of a protest against rise in prices of fuel and LPG, in Kolkata

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New Delhi: India’s inflation rate — the average annual change in prices of a bundle of commodities (Consumer Price Index) — has been hovering above its upper tolerance limit of 6 percent since January 2022.

From edible oils to food items to fuel, almost all consumer goods have gotten relatively dearer. However, data shows that the price pinch felt by an average Indian is not even close to what people in more than 100 countries are facing at the moment.

According to inflation statistics collated by tradingeconomics.com — a data repository website — based on inflation data released by governments around the world, India, with its 7.04 percent inflation rate (reported in May 2022), ranks at 108 among a total of 172 countries that the latest inflation data was available.

The data, as of 29 June, also shows that the rate of inflation was more than 10 percent in 63 of the 172 countries, and lower than 10 percent in the rest, including India.


Inflation rate highest in Lebanon, Zimbabwe & Sudan

According to Trading Economics, in four countries, the rate of inflation was above 100 percent. Simply put, people in these countries were on average shelling out twice as much money for the same product compared to what they paid for it last year.

At present, Lebanon faces the worst inflation rate in the world. On average, consumer prices in the small West Asian country have risen by more than 200 percent — consumers are on average paying almost three times more for commodities than they were paying in May last year.

Lebanon’s inflation is fueled by its ongoing financial crisis that implode in 2019, reportedly after years of financial mishaps, piling debt and mismanagement led to the multi-dimensional deterioration of the country’s currency. The country’s inflation rate has been above 200 percent since November last year. In May this year, it was reportedly 211 percent,

Lebanon is followed by two African countries — Zimbabwe and Sudan — which have reported inflation rates of 192 percent each.

Zimbabwe has a long history of ultra-high inflation. In November 2008, the country’s inflation rate peaked at 79.6 billion percent month-on-month. The country has also been known to print more money, which has failed to control the country’s price surge. In 2019, Zimbabwe brought back its old currency after a decade of dollarisation,

In June this year, the country’s year-on-year inflation rate was reported to be 192 percent.

Sudan’s inflation problem stems from a foreign currency shortage. In 2018, the country, which relies heavily on imports, faced a severe shortage of foreign currency, leading to a depreciation of the Sudanese pound. The country’s financial problems are exacerbated in 2020, after which the inflation rates have not gone below 100 percent.

Sudan is followed by Venezuela, which used to be at the top of the list some years ago, In May this year, the country reported an inflation rate of 167 percent,

Venezuela is one of the most oil-rich nations in the world, which is also a factor behind its high inflation trajectory. According to the Organization of Petroleum Exporting Countries (OPEC) — a grouping of 13 countries whose aim is to ensure the stabilization of oil markets for an efficient, economic, and regular supply of petroleum, more than 99 percent of Venezuela’s export earnings come from oil.

In 2014, when global oil prices crashed due to a variety of reasons, so did Venezuela’s economy. In 2018, the annual inflation rate averaged more than 65,000 percent, according to data available on the International Monetary Fund’s portal.

Venezuela is followed by Turkey, where the inflation rate reached 73.5 percent in May. Turkey’s populist leader Recep Tayyip Erdogan’s experimentation with economics caused soaring inflation rates, smashed the lira, and enraged the people of the country.

Inflation rates are above 50 percent in two South American countries too, according to Trading Economics — Argentina and Suriname.

Meanwhile, in Sri Lanka, where the economic crisis has triggered protests across the country, the latest inflation rate was reported to be 54.6 percent.

China, and Japan are among the top economies with the lowest inflation rates

According to the Trading Economics dataset, the rate of inflation was lower than 2 percent in five countries. But these are small countries with a collective population of around 21 million.

In May, Macau, a special administrative region in China, reported an inflation rate of 1.1 percent, the lowest in the world followed by Hong Kong (1.2 percent, Hong Kong is also a special administrative region of China), Maldives (1.2 percent), Gabon (1.2 percent) and Bolivia (1.4 percent).

Among the powerful economies (highest GDP), China and Japan have the lowest inflation rates at 2.5 percent and 2.1 percent, respectively.

Playing a part in China’s low inflation rates is the fact that its bundle of commodities used to calculate CPI gives more weight to food and clothing, and that it’s zero Covid-19 policy has curtailed consumer demand, the South China Morning Post reported last month,

In Japan, the inflation rate is low characterized by low consumer spending and slow growth in spending on consumer durables.

The US (8.6 percent), India, and Germany (7.9 percent), also large economies, all reported an inflation rate of more than 7 percent inflation in May this year.

India’s high inflation rates were driven by “global price shocks”, according to a statement by Shaktikanta Das, governor of the Reserve Bank of India (RBI).

In its latest report, the Monetary Policy Committee — which is responsible for fixing the benchmark interest rate in India — has pointed out that the domestic outlook for inflation could remain uncertain since India’s inflation is driven by external factors.

“The tense global geopolitical situation and the consequently elevated commodity prices impart considerable uncertainty to the domestic inflation outlook,” read the monetary policy statement for 2022-23, issued on 8 June.

(Edited by Gitanjali Das)

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