Which Countries Have the Lowest Inflation?

Which Countries Have the Lowest Inflation?


Which Countries Have the Lowest Inflation?

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Investors are bracing for longer inflation.

The Federal Reserve indicated that more restrictive monetary policy is in the cards amid strong employment gains. In Europe, while inflation has fallen, it is still far above the 2% target. Across the Euro area inflation is estimated to have reached 8.5% in January.

At the same time, some countries have managed to tamp down inflation. Slower growth, cheaper import costs, and foreign exchange policy are some of the factors keeping inflation subdued.

As price pressures rattle global markets, the above infographic maps inflation rates globally using data from Trading Economics, focusing in on the countries with the lowest inflation levels.

Worldโ€™s Lowest Inflation Rates

Many of the lowest inflation rates around the world are located in Asia, including Macau, China, Hong Kong, and Taiwan. In this region, widespread lockdowns strained growth and consumer spending, lessening inflationary pressures. Last year, Chinese consumers saved $2.2 trillion in bank deposits during these restrictions which were lifted earlier this year.

Inflation in the region was impacted by several other factors. Earlier on in the pandemic, Asian countries including China were less impacted by rising food costs, services inflation, and supply-chain disruptions, unlike what was seen in North America and Europe.

But now as China has reopened, some signs of inflation are beginning to appear. Food prices are up 4.8% annually in December, and hotel rates are rising.

Rank Country / Region Inflation Rate, Year-Over-Year Date
1 ๐Ÿ‡ธ๐Ÿ‡ธ South Sudan -11.6% Dec 2022
2 ๐Ÿ‡ฒ๐Ÿ‡ด Macau 0.8% Nov 2022
3 ๐Ÿ‡จ๐Ÿ‡ณ China 1.8% Dec 2022
4 ๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR 1.8% Nov 2022
5 ๐Ÿ‡ด๐Ÿ‡ฒ Oman 2.1% Nov 2022
6 ๐Ÿ‡ต๐Ÿ‡ฆ Panama 2.1% Dec 2022
7 ๐Ÿ‡ธ๐Ÿ‡จ Seychelles 2.5% Dec 2022
8 ๐Ÿ‡ป๐Ÿ‡บ Vanuatu 2.7% Mar 2022
9 ๐Ÿ‡น๐Ÿ‡ผ Taiwan 2.7% Dec 2022
10 ๐Ÿ‡จ๐Ÿ‡ญ Switzerland 2.8% Dec 2022
11 ๐Ÿ‡ฑ๐Ÿ‡ฎ Liechtenstein 2.8% Dec 2022
12 ๐Ÿ‡ง๐Ÿ‡ฏ Benin 2.8% Dec 2022
13 ๐Ÿ‡ฒ๐Ÿ‡ป Maldives 2.8% Nov 2022
14 ๐Ÿ‡ณ๐Ÿ‡ช Niger 3.1% Dec 2022
15 ๐Ÿ‡ง๐Ÿ‡ณ Brunei 3.1% Nov 2022
16 ๐Ÿ‡ง๐Ÿ‡ด Bolivia 3.2% Nov 2022
17 ๐Ÿ‡ฐ๐Ÿ‡ผ Kuwait 3.2% Nov 2022
18 ๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia 3.3% Dec 2022
19 ๐Ÿ‡ฐ๐Ÿ‡ญ Cambodia 3.6% Oct 2022
20 ๐Ÿ‡ซ๐Ÿ‡ฏ Fiji 3.6% Dec 2022
21 ๐Ÿ‡ช๐Ÿ‡จ Ecuador 3.7% Dec 2022
22 ๐Ÿ‡ฏ๐Ÿ‡ต Japan 3.8% Nov 2022
23 ๐Ÿ‡ฑ๐Ÿ‡พ Libya 3.8% Nov 2022
24 ๐Ÿ‡ง๐Ÿ‡ฒ Bermuda 3.8% Oct 2022
25 ๐Ÿ‡ง๐Ÿ‡ญ Bahrain 3.9% Nov 2022
26 ๐Ÿ‡ฒ๐Ÿ‡พ Malaysia 4.0% Nov 2022
27 ๐Ÿ‡ต๐Ÿ‡ธ Palestine 4.1% Dec 2022
28 ๐Ÿ‡ฎ๐Ÿ‡ถ Iraq 4.2% Nov 2022
29 ๐Ÿ‡ฏ๐Ÿ‡ด Jordan 4.4% Dec 2022
30 ๐Ÿ‡น๐Ÿ‡ฏ Tajikistan 4.5% Nov 2022
31 ๐Ÿ‡ป๐Ÿ‡ณ Vietnam 4.6% Dec 2022
32 ๐Ÿ‡ง๐Ÿ‡น Bhutan 4.6% Nov 2022
33 ๐Ÿ‡น๐Ÿ‡ฟ Tanzania 4.8% Dec 2022
34 ๐Ÿ‡ณ๐Ÿ‡จ New Caledonia 4.9% Dec 2022
35 ๐Ÿ‡ฐ๐Ÿ‡ท South Korea 5.0% Dec 2022
36 ๐Ÿ‡ฎ๐Ÿ‡ฑ Israel 5.3% Dec 2022
37 ๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg 5.4% Dec 2022
38 ๐Ÿ‡ธ๐Ÿ‡ฟ Swaziland 5.5% Oct 2022
39 ๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia 5.5% Dec 2022
40 ๐Ÿ‡ฌ๐Ÿ‡ฆ Gabon 5.7% Oct 2022
41 ๐Ÿ‡จ๐Ÿ‡ฎ Ivory Coast 5.7% Nov 2022
42 ๐Ÿ‡ช๐Ÿ‡ธ Spain 5.7% Dec 2022
43 ๐Ÿ‡ฎ๐Ÿ‡ณ India 5.7% Dec 2022
44 ๐Ÿ‡ง๐Ÿ‡ท Brazil 5.8% Dec 2022
45 ๐Ÿ‡น๐Ÿ‡ญ Thailand 5.9% Dec 2022
46 ๐Ÿ‡ซ๐Ÿ‡ท France 5.9% Dec 2022
47 ๐Ÿ‡ณ๐Ÿ‡ด Norway 5.9% Dec 2022
48 ๐Ÿ‡ถ๐Ÿ‡ฆ Qatar 5.9% Dec 2022
49 ๐Ÿ‡ฉ๐Ÿ‡ฏ Djibouti 6.1% Sep 2022
50 ๐Ÿ‡ธ๐Ÿ‡ด Somalia 6.1% Dec 2022
51 ๐Ÿ‡น๐Ÿ‡น Trinidad and Tobago 6.2% Sep 2022
52 ๐Ÿ‡ต๐Ÿ‡ฌ Papua New Guinea 6.3% Sep 2022
53 ๐Ÿ‡ต๐Ÿ‡ท Puerto Rico 6.3% Nov 2022
54 ๐Ÿ‡จ๐Ÿ‡ฆ Canada 6.3% Dec 2022
55 ๐Ÿ‡ง๐Ÿ‡ธ Bahamas 6.5% Sep/22
56 ๐Ÿ‡ง๐Ÿ‡ฟ Belize 6.5% Nov 2022
57 ๐Ÿ‡บ๐Ÿ‡ธ U.S. 6.5% Dec 2022
58 ๐Ÿ‡ฆ๐Ÿ‡ผ Aruba 6.6% Nov 2022
59 ๐Ÿ‡ธ๐Ÿ‡ฌ Singapore 6.7% Nov 2022
60 ๐Ÿ‡น๐Ÿ‡ฑ East Timor 6.7% Nov 2022
61 ๐Ÿ‡ฆ๐Ÿ‡ช UAE 6.8% Jun 2022
62 ๐Ÿ‡ณ๐Ÿ‡ฆ Namibia 6.9% Dec 2022
63 ๐Ÿ‡ฌ๐Ÿ‡พ Guyana 6.9% Nov 2022
64 ๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand 7.2% Sep 2022
65 ๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa 7.2% Dec 2022
66 ๐Ÿ‡ฌ๐Ÿ‡ท Greece 7.2% Dec 2022
67 ๐Ÿ‡ฑ๐Ÿ‡ท Liberia 7.2% Sep 2022
68 ๐Ÿ‡ฆ๐Ÿ‡บ Australia 7.3% Sep 2022
69 ๐Ÿ‡ฒ๐Ÿ‡น Malta 7.3% Dec 2022
70 ๐Ÿ‡ธ๐Ÿ‡ป El Salvador 7.3% Dec 2022
71 ๐Ÿ‡ฆ๐Ÿ‡ฑ Albania 7.4% Dec 2022
72 ๐Ÿ‡จ๐Ÿ‡ป Cape Verde 7.6% Dec 2022
73 ๐Ÿ‡จ๐Ÿ‡ฒ Cameroon 7.7% Sep 2022
74 ๐Ÿ‡จ๐Ÿ‡ซ Central African Republic 7.7% Nov 2022
75 ๐Ÿ‡น๐Ÿ‡ฌ Togo 7.7% Dec 2022
76 ๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico 7.8% Dec 2022
77 ๐Ÿ‡ฉ๐Ÿ‡ด Dominican Republic 7.8% Dec 2022
78 ๐Ÿ‡จ๐Ÿ‡ท Costa Rica 7.9% Dec 2022
79 ๐Ÿ‡จ๐Ÿ‡พ Cyprus 7.9% Dec 2022
80 ๐Ÿ‡ฒ๐Ÿ‡ฑ Mali 8.0% Nov 2022
81 ๐Ÿ‡ณ๐Ÿ‡ต Nepal 8.1% Nov 2022
82 ๐Ÿ‡ต๐Ÿ‡ญ Philippines 8.1% Dec 2022
83 ๐Ÿ‡ต๐Ÿ‡พ Paraguay 8.1% Dec 2022
84 ๐Ÿ‡ง๐Ÿ‡ง Barbados 8.2% Oct 2022
85 ๐Ÿ‡ฎ๐Ÿ‡ช Ireland 8.2% Dec 2022
86 ๐Ÿ‡บ๐Ÿ‡พ Uruguay 8.3% Dec 2022
87 ๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco 8.3% Nov 2022
88 ๐Ÿ‡ฆ๐Ÿ‡ฒ Armenia 8.3% Dec 2022
89 ๐Ÿ‡ต๐Ÿ‡ช Peru 8.5% Dec 2022
90 ๐Ÿ‡ฑ๐Ÿ‡ธ Lesotho 8.5% Oct 2022
91 ๐Ÿ‡ฉ๐Ÿ‡ฟ Algeria 8.6% Nov 2022
92 ๐Ÿ‡ฉ๐Ÿ‡ช Germany 8.6% Dec 2022
93 ๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark 8.7% Dec 2022
94 ๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh 8.7% Dec 2022
95 ๐Ÿ‡ซ๐Ÿ‡ด Faroe Islands 8.8% Sep 2022
96 ๐Ÿ‡ซ๐Ÿ‡ฎ Finland 9.1% Dec 2022
97 ๐Ÿ‡ฐ๐Ÿ‡ช Kenya 9.1% Dec 2022
98 ๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands 9.2% Sep 2022
99 ๐Ÿ‡ฌ๐Ÿ‡น Guatemala 9.2% Dec 2022
100 ๐Ÿ‡ฌ๐Ÿ‡ผ Guinea Bissau 9.4% Nov 2022

*Inflation rates based on latest available data.

Globally, one outlier is South Sudan. Political instability and violence have depressed growth and inflation, which stood at -11.6% in December. As it faces a severe humanitarian crisis, the country has the lowest inflation rate worldwide.

Oil-producing nation Oman has also seen low inflation, at 2.1%. One reason for this is that the Omani rial is pegged to the U.S. dollar, keeping the currency anchored. Inflation has remained moderate over the last decade in the country.

The Country With the Lowest Inflation, by Region

In Europe, Switzerland has the lowest inflation rate, at 2.8%, or roughly one-third of the Euro areaโ€™s. It is also the lowest rate in the OECD. The countryโ€™s strong currency has shielded it from inflationary pressures and high import prices.

Meanwhile, Swiss production prices have risen marginally above inflation, to 4.1% annually in mid-2022. Last year, the Swiss central bank raised interest rates for the first time since 2007 from -0.75% to -0.25% following 20 years of deflation.

Countries With the Lowest Inflation by Region

Panama has the lowest rate in Latin America. The dollarization of the Panamanian balboa has helped quash price pressures. In July, the government regulated the price of 72 items to keep the cost of living from rising after three weeks of protests as inflation climbed as high as 5.2% during the course of 2022.

With the lowest inflation in Asia, Macau witnessed the tourism industry fall off a cliff given lockdown measures, and the economy saw both its GDP and inflation collapse in 2022. Its real GDP is projected to have fallen close to 30% for the year.

Future Gazing

The IMF estimates that 84% of countries around the world will have lower inflation than last year. By 2024, both headline and core inflation are projected to remain above pre-pandemic levels at 4.1%.

Opposing forces of Chinaโ€™s reopening and weaker global growth could offset inflationary pressures, yet this interplayโ€”among a host of other factorsโ€”remains to be seen.



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