It is not only Germany that is setting new records for inflation, prices are also rising in many other countries. A world map shows where the inflation hotspots are – and why, despite the record, it is only average in Germany.
7.9 percent inflation? What makes many people sweat on their foreheads in Germany would make people jump for joy elsewhere. The highest inflation rates in the world are currently in Sudan (192 percent), Venezuela (167 percent), Syria (139 percent) and Zimbabwe (132 percent). What all these countries have in common: Discussions about rising gas prices or the Ukraine war are obsolete here. Where prices rise so sharply, there are completely different problems.
For example, Sudan is suffering from a drought that lasts for months. The UN estimates that 20 million of the approximately 44 million inhabitants will suffer from hunger this year. Not only are their own fields failing here, the usual grain deliveries from Russia and the Ukraine are also missing. Food in particular has reached astronomical prices as a result.
In Venezuela, on the other hand, an economic crisis has been holding the country in a stranglehold for several years, Syria is still stuck in the civil war and Zimbabwe has been using its own national currency since 2019, which ended in hyperinflation beforehand and is now considered a failed currency.
But there is also the other extreme in the world, i.e. countries that stare when they hear of 7.9 percent inflation in Germany. South Sudan currently has the lowest inflation rate in the world at minus 4.3 percent. However, that says little there, because South Sudan is also affected by hunger and drought. Falling prices are of little use to the people who live here in abject poverty.
But countries with fewer existential problems also have low inflation rates. The Pacific island state of Vanuatu basks in just 0.7 percent, the Maldives and the small African state of Gabon have 1.2 percent, and Bolivia has 1.4 percent.
Among the economically more powerful countries, China (2.1 percent), Japan (2.5 percent), Saudi Arabia (2.2 percent), Switzerland (2.9 percent) and the United Arab Emirates (2.5 percent) ) the lowest rates.
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The reasons for the low rates in these states vary. Saudi Arabia and the neighboring Emirates are benefiting from the sharp rise in oil and gas prices. This allows government revenues to flow while the raw materials for their own industry remain cheap. If you can get oil and gas cheaply, you have advantages. That is why inflation rates are comparatively low in oil-producing countries such as Malaysia (2.3 percent) and Brunei (3.2 percent).
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China and Japan, on the other hand, heavily subsidize their economies and citizens. This has been the norm in Japan for decades, which is why inflation rates here are always well below the global average – but this has also pushed government debt to the highest level in the world. China, in turn, is trying to compensate for the constant corona lockdowns with economic stimulus packages. In addition, demand for many goods has collapsed, driving prices down. China produces many raw materials itself, so that world market prices do not have the same effect as in Germany, for example.
With 2.9 percent, Switzerland also sets negative records, but remains well below the rates of its neighboring countries. The mountainous region benefits from its strong currency, which makes imports cheaper than elsewhere. In addition, our neighbors are not as dependent on oil and gas as we are, for example.
Globally, Germany is in the middle worldwide with 7.9 percent. The median, which divides all countries into half with more and half with less inflation, is 7.6 percent. In the middle there are also many other industrialized countries in our immediate vicinity. Ireland, for example, has 7.8 percent, Iceland 7.6 percent, our neighbor Austria 7.7 percent, Portugal 8.0 percent and Slovenia 8.1 percent.
Of the major economies, France currently has the lowest rate at 5.2 percent, ahead of Italy and Canada at 6.8 percent each. The fact that the former both subsidize energy costs and the latter is itself a large producer also plays a role here. The USA is at 8.6 percent, Great Britain comes to 9.0 percent.
The latter is the value that the Organization for Economic Co-operation and Development (OECD) estimates the average for its member states this year. Assuming that Germany is average, we could still go a little further up. However, the OECD average is being pushed up above all by the Baltic States. In Latvia (16.9 percent), Lithuania (18.9 percent) and Estonia (20 percent), the rates due to the Ukraine war are already more than twice as high as in Germany.
The International Monetary Fund last issued its global forecasts in April. Two months ago, the experts there were still assuming average rates of 5.7 percent this year in industrialized countries and 8.7 percent in developing and emerging countries. That was already a strong increase compared to the original forecasts from January, which are now outdated again. In July, the IMF will publish its new forecast.
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