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Which Countries Have the Lowest Inflation?

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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.

World’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.

RankCountry / RegionInflation Rate, Year-Over-YearDate
1๐Ÿ‡ธ๐Ÿ‡ธ South Sudan-11.6%Dec 2022
2๐Ÿ‡ฒ๐Ÿ‡ด Macau 0.8%Nov 2022
3๐Ÿ‡จ๐Ÿ‡ณ China1.8%Dec 2022
4๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR1.8%Nov 2022
5๐Ÿ‡ด๐Ÿ‡ฒ Oman2.1%Nov 2022
6๐Ÿ‡ต๐Ÿ‡ฆ Panama2.1%Dec 2022
7๐Ÿ‡ธ๐Ÿ‡จ Seychelles2.5%Dec 2022
8๐Ÿ‡ป๐Ÿ‡บ Vanuatu2.7%Mar 2022
9๐Ÿ‡น๐Ÿ‡ผ Taiwan2.7%Dec 2022
10๐Ÿ‡จ๐Ÿ‡ญ Switzerland2.8%Dec 2022
11๐Ÿ‡ฑ๐Ÿ‡ฎ Liechtenstein2.8%Dec 2022
12๐Ÿ‡ง๐Ÿ‡ฏ Benin2.8%Dec 2022
13๐Ÿ‡ฒ๐Ÿ‡ป Maldives2.8%Nov 2022
14๐Ÿ‡ณ๐Ÿ‡ช Niger3.1%Dec 2022
15๐Ÿ‡ง๐Ÿ‡ณ Brunei3.1%Nov 2022
16๐Ÿ‡ง๐Ÿ‡ด Bolivia3.2%Nov 2022
17๐Ÿ‡ฐ๐Ÿ‡ผ Kuwait3.2%Nov 2022
18๐Ÿ‡ธ๐Ÿ‡ฆ Saudi Arabia3.3%Dec 2022
19๐Ÿ‡ฐ๐Ÿ‡ญ Cambodia3.6%Oct 2022
20๐Ÿ‡ซ๐Ÿ‡ฏ Fiji3.6%Dec 2022
21๐Ÿ‡ช๐Ÿ‡จ Ecuador3.7%Dec 2022
22๐Ÿ‡ฏ๐Ÿ‡ต Japan3.8%Nov 2022
23๐Ÿ‡ฑ๐Ÿ‡พ Libya3.8%Nov 2022
24๐Ÿ‡ง๐Ÿ‡ฒ Bermuda3.8%Oct 2022
25๐Ÿ‡ง๐Ÿ‡ญ Bahrain3.9%Nov 2022
26๐Ÿ‡ฒ๐Ÿ‡พ Malaysia4.0%Nov 2022
27๐Ÿ‡ต๐Ÿ‡ธ Palestine4.1%Dec 2022
28๐Ÿ‡ฎ๐Ÿ‡ถ Iraq4.2%Nov 2022
29๐Ÿ‡ฏ๐Ÿ‡ด Jordan4.4%Dec 2022
30๐Ÿ‡น๐Ÿ‡ฏ Tajikistan4.5%Nov 2022
31๐Ÿ‡ป๐Ÿ‡ณ Vietnam4.6%Dec 2022
32๐Ÿ‡ง๐Ÿ‡น Bhutan4.6%Nov 2022
33๐Ÿ‡น๐Ÿ‡ฟ Tanzania4.8%Dec 2022
34๐Ÿ‡ณ๐Ÿ‡จ New Caledonia4.9%Dec 2022
35๐Ÿ‡ฐ๐Ÿ‡ท South Korea5.0%Dec 2022
36๐Ÿ‡ฎ๐Ÿ‡ฑ Israel5.3%Dec 2022
37๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg5.4%Dec 2022
38๐Ÿ‡ธ๐Ÿ‡ฟ Swaziland5.5%Oct 2022
39๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia5.5%Dec 2022
40๐Ÿ‡ฌ๐Ÿ‡ฆ Gabon5.7%Oct 2022
41๐Ÿ‡จ๐Ÿ‡ฎ Ivory Coast5.7%Nov 2022
42๐Ÿ‡ช๐Ÿ‡ธ Spain5.7%Dec 2022
43๐Ÿ‡ฎ๐Ÿ‡ณ India5.7%Dec 2022
44๐Ÿ‡ง๐Ÿ‡ท Brazil5.8%Dec 2022
45๐Ÿ‡น๐Ÿ‡ญ Thailand5.9%Dec 2022
46๐Ÿ‡ซ๐Ÿ‡ท France5.9%Dec 2022
47๐Ÿ‡ณ๐Ÿ‡ด Norway5.9%Dec 2022
48๐Ÿ‡ถ๐Ÿ‡ฆ Qatar5.9%Dec 2022
49๐Ÿ‡ฉ๐Ÿ‡ฏ Djibouti6.1%Sep 2022
50๐Ÿ‡ธ๐Ÿ‡ด Somalia6.1%Dec 2022
51๐Ÿ‡น๐Ÿ‡น Trinidad and Tobago6.2%Sep 2022
52๐Ÿ‡ต๐Ÿ‡ฌ Papua New Guinea6.3%Sep 2022
53๐Ÿ‡ต๐Ÿ‡ท Puerto Rico6.3%Nov 2022
54๐Ÿ‡จ๐Ÿ‡ฆ Canada6.3%Dec 2022
55๐Ÿ‡ง๐Ÿ‡ธ Bahamas6.5%Sep/22
56๐Ÿ‡ง๐Ÿ‡ฟ Belize6.5%Nov 2022
57๐Ÿ‡บ๐Ÿ‡ธ U.S.6.5%Dec 2022
58๐Ÿ‡ฆ๐Ÿ‡ผ Aruba6.6%Nov 2022
59๐Ÿ‡ธ๐Ÿ‡ฌ Singapore6.7%Nov 2022
60๐Ÿ‡น๐Ÿ‡ฑ East Timor6.7%Nov 2022
61๐Ÿ‡ฆ๐Ÿ‡ช UAE6.8%Jun 2022
62๐Ÿ‡ณ๐Ÿ‡ฆ Namibia6.9%Dec 2022
63๐Ÿ‡ฌ๐Ÿ‡พ Guyana6.9%Nov 2022
64๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand7.2%Sep 2022
65๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa7.2%Dec 2022
66๐Ÿ‡ฌ๐Ÿ‡ท Greece7.2%Dec 2022
67๐Ÿ‡ฑ๐Ÿ‡ท Liberia7.2%Sep 2022
68๐Ÿ‡ฆ๐Ÿ‡บ Australia7.3%Sep 2022
69๐Ÿ‡ฒ๐Ÿ‡น Malta7.3%Dec 2022
70๐Ÿ‡ธ๐Ÿ‡ป El Salvador7.3%Dec 2022
71๐Ÿ‡ฆ๐Ÿ‡ฑ Albania7.4%Dec 2022
72๐Ÿ‡จ๐Ÿ‡ป Cape Verde7.6%Dec 2022
73๐Ÿ‡จ๐Ÿ‡ฒ Cameroon7.7%Sep 2022
74๐Ÿ‡จ๐Ÿ‡ซ Central African Republic7.7%Nov 2022
75๐Ÿ‡น๐Ÿ‡ฌ Togo7.7%Dec 2022
76๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico7.8%Dec 2022
77๐Ÿ‡ฉ๐Ÿ‡ด Dominican Republic7.8%Dec 2022
78๐Ÿ‡จ๐Ÿ‡ท Costa Rica7.9%Dec 2022
79๐Ÿ‡จ๐Ÿ‡พ Cyprus7.9%Dec 2022
80๐Ÿ‡ฒ๐Ÿ‡ฑ Mali8.0%Nov 2022
81๐Ÿ‡ณ๐Ÿ‡ต Nepal8.1%Nov 2022
82๐Ÿ‡ต๐Ÿ‡ญ Philippines8.1%Dec 2022
83๐Ÿ‡ต๐Ÿ‡พ Paraguay8.1%Dec 2022
84๐Ÿ‡ง๐Ÿ‡ง Barbados8.2%Oct 2022
85๐Ÿ‡ฎ๐Ÿ‡ช Ireland8.2%Dec 2022
86๐Ÿ‡บ๐Ÿ‡พ Uruguay8.3%Dec 2022
87๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco8.3%Nov 2022
88๐Ÿ‡ฆ๐Ÿ‡ฒ Armenia8.3%Dec 2022
89๐Ÿ‡ต๐Ÿ‡ช Peru8.5%Dec 2022
90๐Ÿ‡ฑ๐Ÿ‡ธ Lesotho8.5%Oct 2022
91๐Ÿ‡ฉ๐Ÿ‡ฟ Algeria8.6%Nov 2022
92๐Ÿ‡ฉ๐Ÿ‡ช Germany8.6%Dec 2022
93๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark8.7%Dec 2022
94๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh8.7%Dec 2022
95๐Ÿ‡ซ๐Ÿ‡ด Faroe Islands8.8%Sep 2022
96๐Ÿ‡ซ๐Ÿ‡ฎ Finland9.1%Dec 2022
97๐Ÿ‡ฐ๐Ÿ‡ช Kenya9.1%Dec 2022
98๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands9.2%Sep 2022
99๐Ÿ‡ฌ๐Ÿ‡น Guatemala9.2%Dec 2022
100๐Ÿ‡ฌ๐Ÿ‡ผ Guinea Bissau9.4%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 area’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 China’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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Real Estate

Mapped: The Growth in House Prices by Country

Global house prices were resilient in 2022, rising 6%. We compare nominal and real price growth by country as interest rates surged.

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The Growth in House Prices by Country

Mapped: The Growth in House Prices by Country

This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.

Global housing prices rose an average of 6% annually, between Q4 2021 and Q4 2022.

In real terms that take inflation into account, prices actually fell 2% for the first decline in 12 years. Despite a surge in interest rates and mortgage costs, housing markets were noticeably stable. Real prices remain 7% above pre-pandemic levels.

In this graphic, we show the change in residential property prices with data from the Bank for International Settlements (BIS).

The Growth in House Prices, Ranked

The following dataset from the BIS covers nominal and real house price growth across 58 countries and regions as of the fourth quarter of 2022:

Price Growth
Rank
Country /
Region
Nominal Year-over-Year
Change (%)
Real Year-over-Year
Change (%)
1๐Ÿ‡น๐Ÿ‡ท Tรผrkiye167.951.0
2๐Ÿ‡ท๐Ÿ‡ธ Serbia23.17.0
3๐Ÿ‡ท๐Ÿ‡บ Russia23.19.7
4๐Ÿ‡ฒ๐Ÿ‡ฐ North Macedonia20.61.0
5๐Ÿ‡ฎ๐Ÿ‡ธ Iceland20.39.9
6๐Ÿ‡ญ๐Ÿ‡ท Croatia17.33.6
7๐Ÿ‡ช๐Ÿ‡ช Estonia16.9-3.0
8๐Ÿ‡ฎ๐Ÿ‡ฑ Israel16.811.0
9๐Ÿ‡ญ๐Ÿ‡บ Hungary16.5-5.1
10๐Ÿ‡ฑ๐Ÿ‡น Lithuania16.0-5.5
11๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia15.44.2
12๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria13.4-3.2
13๐Ÿ‡ฌ๐Ÿ‡ท Greece12.23.7
14๐Ÿ‡ต๐Ÿ‡น Portugal11.31.3
15๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom10.0-0.7
16๐Ÿ‡ธ๐Ÿ‡ฐ Slovak Republic9.7-4.8
17
๐Ÿ‡ฆ๐Ÿ‡ช United Arab Emirates
9.62.9
18๐Ÿ‡ต๐Ÿ‡ฑ Poland9.3-6.9
19๐Ÿ‡ฑ๐Ÿ‡ป Latvia9.1-10.2
20๐Ÿ‡ธ๐Ÿ‡ฌ Singapore8.61.9
21๐Ÿ‡ฎ๐Ÿ‡ช Ireland8.6-0.2
22๐Ÿ‡จ๐Ÿ‡ฑ Chile8.2-3.0
23๐Ÿ‡ฏ๐Ÿ‡ต Japan7.93.9
24๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico7.9-0.1
25๐Ÿ‡ต๐Ÿ‡ญ Philippines7.7-0.2
26๐Ÿ‡บ๐Ÿ‡ธ United States7.10.0
27๐Ÿ‡จ๐Ÿ‡ฟ Czechia6.9-7.6
28๐Ÿ‡ท๐Ÿ‡ด Romania6.7-7.5
29๐Ÿ‡ฒ๐Ÿ‡น Malta6.3-0.7
30๐Ÿ‡จ๐Ÿ‡พ Cyprus6.3-2.9
31๐Ÿ‡จ๐Ÿ‡ด Colombia6.3-5.6
32๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg5.6-0.5
33๐Ÿ‡ช๐Ÿ‡ธ Spain5.5-1.1
34๐Ÿ‡จ๐Ÿ‡ญ Switzerland5.42.4
35๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands5.4-5.3
36๐Ÿ‡ฆ๐Ÿ‡น Austria5.2-4.8
37๐Ÿ‡ซ๐Ÿ‡ท France4.8-1.2
38๐Ÿ‡ง๐Ÿ‡ช Belgium4.7-5.7
39๐Ÿ‡น๐Ÿ‡ญ Thailand4.7-1.1
40๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa3.1-4.0
41๐Ÿ‡ฎ๐Ÿ‡ณ India2.8-3.1
42๐Ÿ‡ฎ๐Ÿ‡น Italy2.8-8.0
43๐Ÿ‡ณ๐Ÿ‡ด Norway2.6-3.8
44๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia2.0-3.4
45๐Ÿ‡ต๐Ÿ‡ช Peru1.5-6.3
46๐Ÿ‡ฒ๐Ÿ‡พ Malaysia1.2-2.6
47๐Ÿ‡ฐ๐Ÿ‡ท South Korea-0.1-5.0
48๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco-0.1-7.7
49๐Ÿ‡ง๐Ÿ‡ท Brazil-0.1-5.8
50๐Ÿ‡ซ๐Ÿ‡ฎ Finland-2.3-10.2
51๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark-2.4-10.6
52๐Ÿ‡ฆ๐Ÿ‡บ Australia-3.2-10.2
53๐Ÿ‡ฉ๐Ÿ‡ช Germany-3.6-12.1
54๐Ÿ‡ธ๐Ÿ‡ช Sweden-3.7-13.7
55๐Ÿ‡จ๐Ÿ‡ณ China-3.7-5.4
56๐Ÿ‡จ๐Ÿ‡ฆ Canada-3.8-9.8
57๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand-10.4-16.5
58๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong SAR-13.5-15.1

Tรผrkiyeโ€™s property prices jumped the highest globally, at nearly 168% amid soaring inflation.

Real estate demand has increased alongside declining interest rates. The government drastically cut interest rates from 19% in late 2021 to 8.5% to support a weakening economy.

Many European countries saw some of the highest price growth in nominal terms. A strong labor market and low interest rates pushed up prices, even as mortgage rates broadly doubled across the continent. For real price growth, most countries were in negative territoryโ€”notably Sweden, Germany, and Denmark.

Nominal U.S. housing prices grew just over 7%, while real price growth halted to 0%. Prices have remained elevated given the stubbornly low supply of inventory. In fact, residential prices remain 45% above pre-pandemic levels.

How Do Interest Rates Impact Property Markets?

Global house prices boomed during the pandemic as central banks cut interest rates to prop up economies.

Now, rates have returned to levels last seen before the Global Financial Crisis. On average, rates have increased four percentage points in many major economies. Roughly three-quarters of the countries in the BIS dataset witnessed negative year-over-year real house price growth as of the fourth quarter of 2022.

Interest rates have a large impact on property prices. Cross-country evidence shows that for every one percentage point increase in real interest rates, the growth rate of housing prices tends to fall by about two percentage points.

When Will Housing Prices Fall?

The rise in U.S. interest rates has been counteracted by homeowners being reluctant to sell so they can keep their low mortgage rates. As a result, it is keeping inventory low and prices high. Homeowners canโ€™t sell and keep their low mortgage rates unless they meet strict conditions on a new property.

Additionally, several other factors impact price dynamics. Construction costs, income growth, labor shortages, and population growth all play a role.

With a strong labor market continuing through 2023, stable incomes may help stave off prices from falling. On the other hand, buyers with floating-rate mortgages face steeper costs and may be unable to afford new rates. This could increase housing supply in the market, potentially leading to lower prices.

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