Ferghana state university "Social and humanitarian sciences" department

Which countries have the highest level of inflation?
Global inflation is expected to reach 8.8% in 2022. However, some countries are being much more harshly impacted than others.
Inflation rates are rising rapidly in most countries, but which are the worst affected?
Inflation rates are soaring throughout the world. Many economies are experiencing double or triple digit rises in prices.
Key findings:

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  Inflation is soaring across most of the world’s economies.
  
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  Real risk of many countries entering an economic recession.
  
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  The war in Ukraine has caused spikes in food and fuel prices.
  
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  Argentina and Turkey are experiencing the highest inflation in the G20.
  
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  Argentina’s persistent inflation problems are getting worse.
  
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  Russian inflation has doubled since its invasion of Ukraine, but is falling.
  
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  Germany, Italy and the UK are at double-digit levels.
  
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  Poor economies, the import reliant and economically mismanaged, are at higher risk.
  
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  Effective interest rate rises and market-accepted government policies are the resolution.
  

Global pressures are causing rising prices
Russia’s invasion of Ukraine has had a direct impact on global price levels. The cost of food and fuel have notably risen as Russia is a leading exporter of oil and gas and both Ukraine and Russia account for large quantities in the trade of certain foods, particularly grains, as well as iron. The reduction in production and trade of these goods drives price levels upwards. This has happened as it has been physically impossible to produce the same volume of products in a warzone. Also, Western sanctions on Russia have effectively reduced supply to those countries.
These price rises also have knock-on effects in other industries. For example, rising fuel costs impact the logistics industry as companies have higher transportation costs. Food companies that use grains in their ingredients must either absorb the price hike in the grain or pass it on to consumers. These could be restaurateurs, supermarkets or individuals themselves.
Covid-19-related lockdowns in China, the world’s largest goods exporter, have also impacted prices. Lockdowns have caused production levels to fall, driving up prices. Although these lockdowns have had an impact on a global scale, the countries that rely heavily on Chinese importers have been most affected. Sri Lanka, which is on the verge of collapse, gets almost one-quarter of its total goods imports from China, and it is not alone in recording such figures. It should be noted, however, that in Sri Lanka’s case, high inflation is only one component of the country’s downfall, with economic mismanagement the primary perpetrator.
Additionally, supply chain issues ­– the ability to get goods from production to consumption – still linger. Not only do these directly impact inflation, they are also directly impacted by inflation. A vicious cycle.
Which G20 countries have the highest inflation rates?
Argentina and Turkey are currently experiencing the highest inflation rates in the G20. In October 2022, Turkey’s rate reached 85.51% (compared with prices in October 2021). This means that goods costing 100 Turkish lira (Tl) in September 2021 would now cost Tl185.51. It has also experienced the largest growth in inflation of any G20 country, more than 60 percentage points inside 12 months. Its biggest causes of rising prices are related to transport, food and housing. The lira is also in freefall against the US dollar. One lira is worth $0.054 (as of 16 November 2022), half the value it was around the same period in 2021 and one-quarter of the rate in 2017. President Recep Tayyip Erdoğan’s decision to cut interest rates is not helping inflationary pressures.
Argentina’s persistent hyperinflation is on an upward spiral. Prices in October 2022 were 88% higher than October 2021. This means it has overtaken Turkey to be G20 country experiencing the highest level of inflation. Argentina has been battling inflationary problems for several years. Covid-19 saw inflation escalate to 50% in 2019, but the country was experiencing 40% inflation in 2016. Its central bank has raised its benchmark interest rate to 75% in a bid to control the situation. The fact the interest rate has reached such levels tells its own story about the country’s economic woes.
Russia has seen its inflation rate more than double since its invasion of Ukraine. According to its national statistics office, inflation peaked at 17.3% in April 2022 but has since been falling. In October 2022, its inflation rate was 12.6%. The Russian central bank decided to cut interest rates in September, stating that consumer price growth rates remain low. It expects Russia’s inflation rate to return to its target (4%) in 2024. This will depend heavily on the outcome of the conflict in Ukraine. Germany, Italy and UK are struggling to curb inflation
Inflation in the UK is at its highest level in 40 years. In October 2022, the country’s inflation rate was 11.1%, up slightly from September (10.1%). The Bank of England expects inflation to peak at 11% in October 2022 then remain above 10% for a few months before coming down.
Germany's October 2022 figures show its consumer price index (CPI) has jumped to 10.4% (having been 7.9% in August and 10% in September). This is the country's highest rate since German reunification. Energy prices were 43% higher in October 2022 compared with October 2021. Chancellor Olaf Scholz has announced plans for an energy relief package worth €150–200bn ($145–194bn) to try to bring down prices. Entering a recession in the coming months is a real possibility for the EU’s largest economy.
Another advanced western European economy hitting double-digit inflation is Italy. Year-on-year inflation reached 11.9% in October 2022. This is the highest rate of any advanced economy in the G20. Similar to Germany, energy costs in Italy have increased by 45%. However, it is food costs that are driving inflation further upwards in the southern European country.