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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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Money

Ranked: Top Countries for Foreign Direct Investment Flows

Take a look at changes in foreign direct investment flows over a decade, analyzing the top destinations and biggest investors.

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A cropped chart showing the top foreign investment flows between 2012โ€“2022.

One of the most significant phenomena in 21st-century globalization, driven by the ascent of multinational corporations and the removal of investing barriers, is the vast cross-border flow of foreign capital.

To analyze recent trends, Samidha Nayak utilized World Bank data spanning 2012โ€“2022, charting the top 10 destinations for foreign direct investment (FDI) and the leading investing countries annually.

A chart showing the top foreign direct investment flows (inflows) between 2012โ€“2022.

Countries With the Most FDI Inflows (2012โ€“2022)

In 2012, the United States had the highest FDI inflow, attracting about $250 billion in investment from the rest of the world.

โ„น๏ธ Foreign direct investment is when a resident in one economy has 10 percent or more of the ordinary shares of voting stock of a resident enterprise in a different economy.

At second place, Chinaโ€™s FDI inflows stood about $9 billion lower at $241 billion.

The middle ranks have representatives from Europe (Netherlands, Cyprus), from Asia (Hong Kong) and from South America (Brazil).

Towards the bottom, three OECD countriesโ€”Germany, Ireland, and Australiaโ€”all attracted an average of $60 billion in foreign investment.

Unexpectedly, the British Virgin Islands came in 8th. Their lack of corporate tax makes it a popular place for companies to headquarter, in turn attracting FDI inflows.

2012Country2012 Inflows
(USD Billion)
2022Country2022 Inflows
(USD Billion)
1๐Ÿ‡บ๐Ÿ‡ธ U.S.$250.351๐Ÿ‡บ๐Ÿ‡ธ U.S.$388.08
2๐Ÿ‡จ๐Ÿ‡ณ China$241.212๐Ÿ‡จ๐Ÿ‡ณ China$180.17
3๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$239.673๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$140.84
4๐Ÿ‡ง๐Ÿ‡ท Brazil$92.574๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$120.95
5๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$74.895๐Ÿ‡ซ๐Ÿ‡ท France$105.42
6๐Ÿ‡จ๐Ÿ‡พ Cyprus$69.976๐Ÿ‡ง๐Ÿ‡ท Brazil$91.50
7๐Ÿ‡ฉ๐Ÿ‡ช Germany$65.447๐Ÿ‡ฆ๐Ÿ‡บ Australia$67.12
8๐Ÿ‡ป๐Ÿ‡ฌ British Virgin Islands$61.128๐Ÿ‡จ๐Ÿ‡ฆ Canada$53.71
9๐Ÿ‡ฎ๐Ÿ‡ช Ireland$58.099๐Ÿ‡ธ๐Ÿ‡ช Sweden$50.05
10๐Ÿ‡ฆ๐Ÿ‡บ Australia$57.5510๐Ÿ‡ฎ๐Ÿ‡ณ India$49.94

Ten years later however, the top 10 saw a shuffle. The U.S. and China retained their top spots, but the difference grew much largerโ€”with the U.S. attracting nearly 50% more foreign investment ($388 billion) than China ($180 billion).

Singapore, which first appeared in the rankings in 2014, took third place with $141 billion.

Meanwhile the bottom half changed almost entirely with France, Canada, Sweden, and India replacing Cyprus, Germany, the British Virgin Islands, and Ireland.

Countries With the Most FDI Outflows (2012โ€“2022)

Unlike the ranks of net inflows, the top 10 countries with the highest FDI outflows have stayed essentially the same.

A chart showing the top foreign direct investment flows (outflows) between 2012โ€“2022.

The U.S. topped the list in both ends of the decade, despite briefly falling out of the top 10 entirely in 2018. There were only three new entrants (France, Australia, and the UK) in 2022 compared to 10 years prior, with Cyprus, Switzerland, and the British Virgin Islands dropping out of top spots.

2012Country2012 Outflows
(USD Billion)
2022Country2022 Outflows
(USD Billion)
1๐Ÿ‡บ๐Ÿ‡ธ U.S.$377.241๐Ÿ‡บ๐Ÿ‡ธ U.S.$426.25
2๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$237.942๐Ÿ‡ฉ๐Ÿ‡ช Germany$178.87
3๐Ÿ‡ฏ๐Ÿ‡ต Japan$117.633๐Ÿ‡ฏ๐Ÿ‡ต Japan$175.40
4๐Ÿ‡ฉ๐Ÿ‡ช Germany$99.084๐Ÿ‡ฌ๐Ÿ‡ง UK$158.93
5๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$88.125๐Ÿ‡จ๐Ÿ‡ณ China$149.69
6๐Ÿ‡จ๐Ÿ‡พ Cyprus$75.256๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$125.89
7๐Ÿ‡จ๐Ÿ‡ณ China$64.967๐Ÿ‡ฆ๐Ÿ‡บ Australia$123.36
8๐Ÿ‡จ๐Ÿ‡ฆ Canada$62.258๐Ÿ‡ซ๐Ÿ‡ท France$118.76
9๐Ÿ‡จ๐Ÿ‡ญSwitzerland$54.309๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$106.86
10๐Ÿ‡ป๐Ÿ‡ฌ British Virgin Islands$53.9410๐Ÿ‡จ๐Ÿ‡ฆ Canada$83.11

Many of the countries who are in the top ranks for inflows (U.S., China, Canada, Australia) are also in the top ranks for outflows both in 2012 and 2022.

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