In this report, we peruse the latest annual inflation rates for the top 25 richest countries.
Our focus is on consumer prices. Consumer prices provide the quickest insights into country-specific inflationary trends, and can be used to measure other cost indicators such as wages and commodities.
Inflation is caused by two complex groups of economic forces.
The cost-push (supply shock) scenario refers to when consumer prices are pushed up by higher costs for wages and raw materials. Cost drivers can include more expensive imports due to a home country’s weaker currency, a spike in commodity prices and powerful union demands.
The second scenario is the demand-pull scenario in which consumer prices get pulled up when spending-power demand exceeds the availability of goods and services. Factors that can galvanize aggregate demand are higher government spending, tax cuts, wage raises resulting from labor shortages and heightened consumer borrowing.
Richest Countries’ Annual Inflation Rates Compared
Listed below are the annual inflation rates for the world’s 25 wealthiest nations in 2008, 2018 and with the latest estimate from the International Monetary Fund for 2019. Percentage rates shown are annual and were in effect as of the dates shown.
You can change the presentation order by clicking the triangle icons at the top of each column. Starting with the largest economy, the Rank column refers to the relative size of each country in terms of Gross Domestic Product (GDP) on a Purchasing Power Parity basis. To the right are 2 change-related columns that document the change since 2018 and 2008 in terms of percentage points for each year rather than as percentage amounts.
| Rank | Country | 2019 | 2018 | 2008 | 2018-9 | 2008-19 |
|---|---|---|---|---|---|---|
| 1 | China | 2.3% | 2.1% | 5.9% | +0.2% | -3.6% |
| 2 | United States | 1.8% | 2.4% | 3.8% | -0.6% | -2.0% |
| 3 | India | 3.4% | 3.4% | 9.1% | +0.01% | -5.7% |
| 4 | Japan | 1% | 1% | 1.4% | +0.01% | -0.4% |
| 5 | Germany | 1.5% | 1.9% | 2.7% | -0.4% | -1.3% |
| 6 | Russia | 4.7% | 2.9% | 14.1% | +1.8% | -9.4% |
| 7 | Indonesia | 3.2% | 3.2% | 9.8% | +0.01% | -6.6% |
| 8 | Brazil | 3.8% | 3.7% | 5.7% | +0.1% | -1.9% |
| 9 | United Kingdom | 1.8% | 2.5% | 3.6% | -0.7% | -1.8% |
| 10 | France | 1.2% | 2.1% | 3.2% | -0.9% | -2% |
| 11 | Mexico | 3.8% | 4.9% | 5.1% | -1.1% | -1.4% |
| 12 | Italy | 0.7% | 1.2% | 3.5% | -0.5% | -2.8% |
| 13 | Turkey | 15.7% | 16.3% | 10.4% | -0.7% | +5.2% |
| 14 | South Korea | 0.5% | 1.5% | 4.7% | -1.0% | -4.2% |
| 15 | Spain | 0.7% | 1.7% | 4.1% | -1.0% | -3.4% |
| 16 | Canada | 2% | 2.2% | 2.4% | -0.2% | -0.4% |
| 17 | Saudi Arabia | -1.1% | 2.5% | 6.1% | -3.5% | -7.1% |
| 18 | Iran | 35.7% | 30.5% | 25.3% | +5.2% | +10.4% |
| 19 | Egypt | 13.9% | 20.9% | 11.7% | -7.0% | +2.2% |
| 20 | Thailand | 0.9% | 1.1% | 5.5% | -0.2% | -4.6% |
| 21 | Australia | 1.6% | 2% | 4.3% | -0.4% | -2.8% |
| 22 | Taiwan | 0.8% | 1.5% | 3% | -0.7% | -2.2% |
| 23 | Poland | 2.4% | 1.6% | 4.2% | +0.8% | -1.8% |
| 24 | Nigeria | 11.3% | 12.1% | 11.6% | -0.8% | -0.3% |
| 25 | Pakistan | 7.3% | 3.9% | 12% | +3.4% | -4.7% |
Only 3 among the top 25 richest countries posted higher inflation rates in 2019 compared to 2008 when the Great Recession began. These are Iran (up 10.4 percentage points from 2008), Turkey (up 5.2 percentage points) and Egypt (up 2.2 percentage points).
Leading the declines in inflation rates since 2008 were Russia (down -9.4 percentage points), Saudi Arabia (down -7.1 percentage points, Indonesia (down -6.6 percentage points, India (down -5.7 percentage points) and Pakistan (down -4.7 percentage points).
Which Richest Countries Have Acceptable Inflation Levels?
According to general rules of thumb from The Economist, annual inflation between 0 to 3% is considered good. Double-digit inflation rates are indisputably bad news. Similarly, a negative annual inflation rate is also bad news since it signals a fall in prices known as deflation and–almost always–a shrinking economy.
Fourteen of the 25 richest countries have annual inflation rates in 2019 that satisfy the 0 to 3% test. Those economies with the lowest inflation rates include South Korea (0.5%), Spain (0.7%), Italy (also 0.7%), Taiwan (0.8%) and Thailand (0.9%).
However. there are no scientific inflation benchmarks etched in stone. A note on the website for America’s Board of Governors of the Federal Reserve System states that policymakers generally believe that an acceptable level of inflation is around 2% or slightly lower.
Ten larger economies experienced concerning levels of inflation for 2019 namely Iran (35.7%), Turkey (15.7%), Egypt (13.9%) and Nigeria (11.3%).
On the other hand, Saudi Arabia posted a negative annual inflation rate of -1.1% in 2019. Should that number stand (Saudi Arabia is notorious for late statistics and subsequent revisions) and should oil prices remain relatively low, a recession may be upcoming for that Middle Eastern nation.
See also Exchange Rates for Top 25 Richest Countries, Central Bank Interest Rates and Top 100 Richest Countries by GDP
Research Reference Materials:
Board of Governors of the Federal Reserve System, Current FAQs: What is an acceptable level of inflation?. Accessed on November 20, 2019
Central Intelligence Agency, The World Factbook Country Comparison: Inflation Rate (Consumer Prices). Accessed on November 20, 2019
International Monetary Fund, Monetary Data: Inflation, average consumer prices, percent change. Accessed on November 20, 2019
Organisation for Economic Co-operation and Development, Consumer price indices (CPIs) – Complete database. Accessed on November 20, 2019
The Economist, Guide to Economic Indicators: Making Sense of Economics (7th Edition). Accessed on November 20, 2019
Trading Economics, Economic Indicators by Category: Inflation Rate. Accessed on November 20, 2019
Wikipedia, List of countries by inflation rate. Accessed on November 20, 2019