Inflation rates by country: how does the US rank?


Key learning points

  • US inflation is currently at 7.7%, which remains high by historical standards.
  • On a global scale, however, it looks practically miniscule as some countries are currently experiencing inflation rates above 200%.
  • At the other end of the spectrum, many Asian countries have managed to keep inflation around 2%.

We may not be hearing much about inflation right now, but that doesn’t mean it hasn’t disappeared anywhere. In the United States, it may have started to decline, but it still remains near record highs.

October’s 7.7% rate is still the highest we’ve seen since 1982 before 2022.

With the Fed determined to cut rates, we’ve seen four consecutive rate hikes of 0.75 percentage points. This is the fastest rate of increase in 35 years, with more increases almost certainly to come in the next 12 months.

So while it seems like inflation is starting to take a turn in the US, it is continuing its relentless rise in many other countries around the world.

Many economies have been hit by rising prices in the aftermath of the pandemic, but there are also a small number of notable outliers that have managed to keep inflation low.

So where is the US in the big picture?

Download today for access to AI-powered investment strategies.

Countries with the highest inflation rates

While we haven’t been too happy with inflation moving from high single digits to low double digits, we’re actually doing quite well compared to the hardest hit countries. Clearly, the majority of the places with the worst inflation rates in the world are experiencing serious economic turmoil.

Such high rates of inflation do not occur in fully functioning economies, and many countries end up reverting to using the US dollar if their home currencies lose value too quickly. It may also eventually lead them to abandon their currency altogether and create a new one or stick with the dollar for good.

Either way, it’s not good news for the people who live there.

Zimbabwe +269%

The African country has been dealing with huge inflation rates for decades. From numbers between 20% – 50% in the 1990s to over 500% in the early 2000s and then getting so high that they are practically unmeasurable after 2008.

They experienced extreme hyperinflation during this time, with the estimated November 2008 peak at a rate of 79,600,000,000% per month.

With that history in mind, current inflation doesn’t actually look that bad. It’s also coming down, and the Zimbabwe Treasury is forecasting that inflation could drop to double digits in 2023.

Lebanon +158%

There is a financial crisis going on in Lebanon and the currency seems to be collapsing as a result. The country’s financial sector is suffering huge losses, but the World Bank has stated that these are too great to be bailed out.

The current gap in finances stands at $72 billion, which is three times higher than Lebanon’s total GDP.

It is estimated that three-quarters of the country’s population has been pushed into poverty by the criticism, and it doesn’t look like it will end anytime soon. Lebanon’s GDP has fallen by 58% between 2019 and 2021, wiping out 15 years of economic growth.

The World Bank is working on a way out of the situation, but it probably won’t be easy or quick.

Venezuela +156%

Like Zimbabwe, Venezuela has experienced hyperinflation in recent years. In April 2019, the International Monetary Fund estimated that the nominal rate in the country would reach 10,000,000% by the end of the year, although official figures were difficult to obtain.

The country has been going through an economic and political crisis since 2016, although high inflation has been prevalent in the country since the early 1980s.

There are signs of a tentative economic recovery after many years of government spending cuts and austerity has helped balance the country’s books.

Other notable examples

In addition, there are many other countries that are also dealing with huge inflation rates. Syria (+139%), Sudan (+103%), Argentina (+88%), Turkey (+85.51%) and Sri Lanka (+66%) are some examples with another 37 countries currently experiencing an inflation rate of have more than 15%. %.

Countries with the lowest inflation rates

At the other end of the spectrum, some countries have managed to keep their inflation rates remarkably low. But as you’d probably expect, this list is much shorter than the record high inflation one.

A striking trend is that almost all countries with the lowest inflation can be found in Asia. Much of this can be attributed to the different consumption habits in this part of the world. A simple example is that Asian cultures eat much more rice than Western countries, with a much lower content of wheat-based products in their diet.

The price of wheat has increased by approximately 17% in the first half of 2022 compared to 8% for rice. There are other examples of price drops in foods such as pork, for reasons unrelated to the Covid19 pandemic.

And the other important factor, of course, is that life in many countries in Asia is not normal anymore. China is still chasing a zero-covid approach, Hong Kong is equally restrictive and Malaysia is also slow to transition to normalcy. This means that demand has not returned to pre-pandemic levels as in other parts of the world.

As a result, many countries in the region are experiencing low inflation. Some examples are Macau (+1.02%), Hong Kong (+1.8%), mainland China (+2.1%), Oman (+2.39%) and Taiwan (+2.72% ).

It remains to be seen if these countries will be able to maintain these low rates, or if they will simply postpone the inevitable.

How the US is doing

So overall, the US numbers are actually not that bad. Of course prices are rising more than usual and we all have to tighten our belts, but we should be thankful that we live in a country where inflation of 8 or 9% is a record high.

Of the G20, the US is roughly in the middle of the pack.

China 2.1%

Saudi Arabia 3.0%

Switzerland 3.0%

Japan 3.7%

South Korea 5.7%

Indonesia 5.7%

France 6.2%

Brazil 6.5%

Singapore 6.7%

India 6.8%

Canadian 6.9%

Australia 7.3%

Spain 7.3%

South Africa 7.6%

United States 7.7%

Mexico 8.4%

Germany 10.4%

United Kingdom 11.1%

Italy 11.8%

Russia 12.6%

Netherlands 14.3%

Turkey 85.51%

Argentina 88%

Inflation is a hugely damaging force that can cause household wealth to evaporate overnight, and it creates significant challenges for people living in countries that may experience hyperinflation.

Regardless of the level of inflation, there is really only one way to properly protect yourself against it. That is to keep your long-term capital in growth assets. Cash in the bank loses value every year, even in stable countries like the US.

What can investors do about inflation?

Many traditional forms of investing, such as real estate and the stock market, will outperform inflation over the long term. It means that money invested in these assets will increase in value above the rate of rising prices, protecting your wealth during periods of high inflation.

The problem is that these assets have their own drawbacks. Real estate is expensive and illiquid, with a high level of associated taxes and fees associated with buying, selling and simply owning it.

Stock markets, on the other hand, can be very volatile. As we’ve seen this year, stocks can fall significantly in the short term, and it can be difficult for investors to stick to a long-term plan while taking large portfolio losses.

To help investors who are unsure of what to do in this situation, we have created the Inflation Protection Kit. This is an investment package that uses the power of AI to invest in assets that have traditionally been viewed as a hedge against inflation.

Each week, our AI predicts which assets within the Kit universe will perform best based on risk adjustment, then automatically rebalances the portfolio to create the optimal mix.

The assets the algorithm considers are Treasury Inflation Protected Securities (TIPS), gold and other precious metals, plus a basket of commodities such as oil and wheat. These are all assets that hold their value as prices rise.

For investors who don’t want to experience the volatility of the stock market but still want their funds to keep pace with inflation, it’s a great option to consider.

Download today for access to AI-powered investment strategies.



Please enter your comment!
Please enter your name here