Which Countries Have The Lowest Inflation?

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, as Visual Capitalist’s Dorothy Neufeld and Sam Parker detail below, 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 infographic below 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.

Rank	Country / Region	Inflation Rate, Year-Over-Year	Date
1	🇸🇸 South Sudan	-11.6%	Dec 2022
2	🇲🇴 Macau	0.8%	Nov 2022
3	🇨🇳 China	1.8%	Dec 2022
4	🇭🇰 Hong Kong SAR	1.8%	Nov 2022
5	🇴🇲 Oman	2.1%	Nov 2022
6	🇵🇦 Panama	2.1%	Dec 2022
7	🇸🇨 Seychelles	2.5%	Dec 2022
8	🇻🇺 Vanuatu	2.7%	Mar 2022
9	🇹🇼 Taiwan	2.7%	Dec 2022
10	🇨🇭 Switzerland	2.8%	Dec 2022
11	🇱🇮 Liechtenstein	2.8%	Dec 2022
12	🇧🇯 Benin	2.8%	Dec 2022
13	🇲🇻 Maldives	2.8%	Nov 2022
14	🇳🇪 Niger	3.1%	Dec 2022
15	🇧🇳 Brunei	3.1%	Nov 2022
16	🇧🇴 Bolivia	3.2%	Nov 2022
17	🇰🇼 Kuwait	3.2%	Nov 2022
18	🇸🇦 Saudi Arabia	3.3%	Dec 2022
19	🇰🇭 Cambodia	3.6%	Oct 2022
20	🇫🇯 Fiji	3.6%	Dec 2022
21	🇪🇨 Ecuador	3.7%	Dec 2022
22	🇯🇵 Japan	3.8%	Nov 2022
23	🇱🇾 Libya	3.8%	Nov 2022
24	🇧🇲 Bermuda	3.8%	Oct 2022
25	🇧🇭 Bahrain	3.9%	Nov 2022
26	🇲🇾 Malaysia	4.0%	Nov 2022
27	🇵🇸 Palestine	4.1%	Dec 2022
28	🇮🇶 Iraq	4.2%	Nov 2022
29	🇯🇴 Jordan	4.4%	Dec 2022
30	🇹🇯 Tajikistan	4.5%	Nov 2022
31	🇻🇳 Vietnam	4.6%	Dec 2022
32	🇧🇹 Bhutan	4.6%	Nov 2022
33	🇹🇿 Tanzania	4.8%	Dec 2022
34	🇳🇨 New Caledonia	4.9%	Dec 2022
35	🇰🇷 South Korea	5.0%	Dec 2022
36	🇮🇱 Israel	5.3%	Dec 2022
37	🇱🇺 Luxembourg	5.4%	Dec 2022
38	🇸🇿 Swaziland	5.5%	Oct 2022
39	🇮🇩 Indonesia	5.5%	Dec 2022
40	🇬🇦 Gabon	5.7%	Oct 2022
41	🇨🇮 Ivory Coast	5.7%	Nov 2022
42	🇪🇸 Spain	5.7%	Dec 2022
43	🇮🇳 India	5.7%	Dec 2022
44	🇧🇷 Brazil	5.8%	Dec 2022
45	🇹🇭 Thailand	5.9%	Dec 2022
46	🇫🇷 France	5.9%	Dec 2022
47	🇳🇴 Norway	5.9%	Dec 2022
48	🇶🇦 Qatar	5.9%	Dec 2022
49	🇩🇯 Djibouti	6.1%	Sep 2022
50	🇸🇴 Somalia	6.1%	Dec 2022
51	🇹🇹 Trinidad and Tobago	6.2%	Sep 2022
52	🇵🇬 Papua New Guinea	6.3%	Sep 2022
53	🇵🇷 Puerto Rico	6.3%	Nov 2022
54	🇨🇦 Canada	6.3%	Dec 2022
55	🇧🇸 Bahamas	6.5%	Sep/22
56	🇧🇿 Belize	6.5%	Nov 2022
57	🇺🇸 U.S.	6.5%	Dec 2022
58	🇦🇼 Aruba	6.6%	Nov 2022
59	🇸🇬 Singapore	6.7%	Nov 2022
60	🇹🇱 East Timor	6.7%	Nov 2022
61	🇦🇪 UAE	6.8%	Jun 2022
62	🇳🇦 Namibia	6.9%	Dec 2022
63	🇬🇾 Guyana	6.9%	Nov 2022
64	🇳🇿 New Zealand	7.2%	Sep 2022
65	🇿🇦 South Africa	7.2%	Dec 2022
66	🇬🇷 Greece	7.2%	Dec 2022
67	🇱🇷 Liberia	7.2%	Sep 2022
68	🇦🇺 Australia	7.3%	Sep 2022
69	🇲🇹 Malta	7.3%	Dec 2022
70	🇸🇻 El Salvador	7.3%	Dec 2022
71	🇦🇱 Albania	7.4%	Dec 2022
72	🇨🇻 Cape Verde	7.6%	Dec 2022
73	🇨🇲 Cameroon	7.7%	Sep 2022
74	🇨🇫 Central African Republic	7.7%	Nov 2022
75	🇹🇬 Togo	7.7%	Dec 2022
76	🇲🇽 Mexico	7.8%	Dec 2022
77	🇩🇴 Dominican Republic	7.8%	Dec 2022
78	🇨🇷 Costa Rica	7.9%	Dec 2022
79	🇨🇾 Cyprus	7.9%	Dec 2022
80	🇲🇱 Mali	8.0%	Nov 2022
81	🇳🇵 Nepal	8.1%	Nov 2022
82	🇵🇭 Philippines	8.1%	Dec 2022
83	🇵🇾 Paraguay	8.1%	Dec 2022
84	🇧🇧 Barbados	8.2%	Oct 2022
85	🇮🇪 Ireland	8.2%	Dec 2022
86	🇺🇾 Uruguay	8.3%	Dec 2022
87	🇲🇦 Morocco	8.3%	Nov 2022
88	🇦🇲 Armenia	8.3%	Dec 2022
89	🇵🇪 Peru	8.5%	Dec 2022
90	🇱🇸 Lesotho	8.5%	Oct 2022
91	🇩🇿 Algeria	8.6%	Nov 2022
92	🇩🇪 Germany	8.6%	Dec 2022
93	🇩🇰 Denmark	8.7%	Dec 2022
94	🇧🇩 Bangladesh	8.7%	Dec 2022
95	🇫🇴 Faroe Islands	8.8%	Sep 2022
96	🇫🇮 Finland	9.1%	Dec 2022
97	🇰🇪 Kenya	9.1%	Dec 2022
98	🇰🇾 Cayman Islands	9.2%	Sep 2022
99	🇬🇹 Guatemala	9.2%	Dec 2022
100	🇬🇼 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 area’s. It is also the lowest rate in the OECD. The country’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.

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 interplay—among a host of other factors—remains to be seen.