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Updated July 4th, 2022 at 12:37 IST

As Inflation cripples the world, here are worst-affected countries in 2022

Amid a storm of the world’s geopolitical challenges, India's inflation rate based on the CPI has been floating above the upper tolerance limit of 6 per cent.

Reported by: Aanchal Nigam
Inflation
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Amid a flurry of the world’s geopolitical challenges, India's inflation rate based on the Consumer Price Index (CPI) has been floating above the upper tolerance limit of 6% since the beginning of 2022. While there is a surge in the price of almost all consumer products in the country, but latest data has revealed that over 100 nations are facing a more devastating blow from the present global circumstances.

International Monetary Fund (IMF) has already suggested that there will be significant inflation pressures around the world this year with developing economies being the worst hit. IMF had projected inflation to reach 8.7% for 2022 in developing economies. The financial institution even revised its inflation projection upwards by another 2.8% after the Russia-Ukraine war. 

According to the inflation statistics accumulated by Trading Economics, a website based on the inflation data released by governments, India is at the 108th position with an inflation rate of 7.04% among 172 nations. The data as of June 29, reveals that the rate of inflation was over 10% in 63 of the 172 nations and below 10% in the rest, including India. But a question arises, which countries are tackling the world’s worst inflation crisis?

World’s most inflated countries

From regional conflicts to financial mishaps, several reasons have driven four countries to an inflation rate of over 100%, meaning, that people in these nations are on average shelling out twice as much money for the same product as what they were paying last year. Presently, Lebanon is tackling the world inflation rate in the world with Sudan, Zimbabwe and Venezuela also recording a gigantic inflation rate this year. 

In Lebanon, which is a small west Asian country, the consumer prices have spiked by over 200% pushing the consumers to pay a threefold average cost for commodities than they were paying in May 2021. The country’s economy is crippled by the financial crisis which came to a head in 2019. In the run-up to the financial crisis, the nation witnessed mishaps, piling debt and mismanagement which ultimately caused the multi-dimensional deterioration of the nation’s currency, the Lebanese pound. While Lebanon’s inflation rate has been above 200% since November 2021, in May 2022, it spiked to 211%.

With an inflation rate of 192%, Zimbabwe and Sudan are the second-worst. 

For long, Zimbabwe has been tackling ultra-high inflation. Its annual inflation rate jumped to 192% in June this year which is also the highest level in more than a year. The food costs more than tripled owing to the sharp depreciation of the Zimbabwean dollar, which has lost more than two-thirds of its value against the dollar in 2022. Making the situation even worse, the Zimbabwean dollar is Africa’s worst-performing currency. 

Back in November 2008, the country’s inflation rate spiked to 79.8 billion per cent month-on-month,. The country has also been known to print more money, which has also failed in controlling the country’s price surge. In 2019, Zimbabwe brought back its old currency after at least a decade of dollarisation. This year, Zimbabwean Finance Minister Mthuli Ncube said that the government would, for the second time in more than a decade, legalise the use of the US dollar. 

Sudan, with an inflation rate the same as Zimbabwe, owes its situation to a foreign currency shortage. While the country heavily relies on imports, in 2018, Sudan faced a severe shortage of foreign currency which further spiralled the depreciation of the Sudanese pound. The country’s financial problems magnified in 2020 after which the inflation rates have not decreased below 100%. Moreover, it is mentioned that the poverty and food insecurity rates in Sudan are expected to further increase until September. 

The Integrated Food Security Phase Classification (IPC) explained that "with significant increases in food and other commodity prices, a reduced harvest, and continued conflict, acute food insecurity in Sudan continues to worsen rapidly".

"Latest acute food insecurity data indicates that around 9.6 million people across Sudan were highly food insecure and classified in Crisis (IPC Phase 3 or above) from April to May 2022. This includes 2.3 million people in IPC Phase 4 (Emergency) and 7.3 million in IPC Phase 3 (Crisis)", a report released last week indicated.

Venezuela comes after Sudan

Even though Venezuela is one of the most oil-rich nations in the world. However, it has become one of the factors that caused an increase in inflation. As of May 2022, Venezuela’s inflation rate stands at 167%. Remarkably, Venezuela began experiencing continuous and uninterrupted inflation in 1983 with inflation rates being in double digits. The country was pushed into hyperinflation last year and the minimum wage in the nation is equivalent to $30 per month. 

Amid fluctuating prices of oil and Venezuela solely depending on petroleum, the country’s economy crashed due to the toppling of global oil prices in 2014. Presently, due to the Russia-Ukraine war, the oil prices in the world are again increasing, and it has further pushed Venezuela into a financial crisis.

Next in line is civil war-stricken Syria

Trading Economics has stated Syria with the fourth-highest inflation in the world with a rate of 139% as of January 2022. The civil war in Syria, which has already lasted for eight years, has crippled the nation with a severe humanitarian crisis. The fighting is between Russia-backed Syrian President Bashar al-Assad’s soldiers and fighters who are known as rebels and want Assan to be ousted. 

Turkey, Argentina, Suriname, Sri Lanka, and Iran are the next five when it comes to high inflation rates in the world. 

In other notable trends, several European nations such as Germany, Italy, Austria, Portugal, and the UK among others are tackling worst inflation rates than India. As of May this year, the UK’s inflation rate as of Trading Economics stands at 9.1%.

US’ inflation rate greater than India

Not only European countries, but the United States is also tackling the worst inflation rate than India. The value is 8.6% which is also the highest since December 1981, according to Trading Economics. The energy prices in America spiked by 34.6%, the most since September 2005 due to gasoline, fuel oil, electricity and natural gas, the website stated. 

Image: Shutterstock

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Published July 4th, 2022 at 12:37 IST

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