Which countries have been hardest hit by inflation and how does it compare to Australia?
Australians are feeling the pressure from inflation, but in some parts of the world inflation rates are almost 11 times higher, causing massive spikes in the prices of goods.
Key points:
- Experts told the ABC developing countries are likely to be hit harder by inflation
- One expert says countries with cautious central banks have so far managed rising inflation better
- The situation in Australia is common in countries such as the US, South Korea, Germany and Canada
According to the Australian Bureau of Statistics, the country’s inflation rate is just above 5 percent.
By comparison, Turkey faces one of the highest inflation rates in the world, currently at around 54 percent, Fariborz Moshirian, director of the global finance institute at the University of New South Wales, told the ABC.
Sri Lanka, where protests over food and fuel shortages have prompted the President to leave the country, has an inflation rate of nearly 55 percent.
Brazil’s inflation is around 12 percent and in Russia, inflation runs between 10 and 14 percent, according to Professor Moshirian.
“There are some parts of the world where you don’t need to have accurate data on inflation, but that’s where you need to care more, like Africa,” he said.
The inflation rate in Argentina is above 60 percent and is expected to reach 70 percent by the end of the year.
For years, the South American country has been battling high inflation with little success. The situation has worsened as global commodity prices have risen over the past year, exacerbated recently by the war in Ukraine.
According to Professor Moshirian, most European countries have inflation ranging between 5 percent and 7.5 percent.
He chose Greece and Italy to have high inflation rates of 12 percent and around 7 percent, respectively.
Scandinavian countries have managed to maintain between 2.5 and 5 percent, he said.
Developing countries are the hardest hit

Professor Moshirian said people in low-income countries would be most affected by inflation.
“If you only have $200 a week to spend and you spend all of your $200 on food and fruit and basic necessities, and if that goes up, say, 10 percent [or] 20 percent, you basically have $10 or $20 less to spend,” he says.
“Whereas if I was earning $2,000 a week and my food and basic necessities were only $200, it wouldn’t affect me as much as other people who earn only $200 say.”
And Professor Moshirian warned that rising inflation rates would have consequences beyond the immediate economy.
He said it would impact families, increase tension and affect people’s physical and mental health, especially when “parents cannot provide enough food for children”.
Developing countries are also more vulnerable to external shocks. And because of supply chain problems and the war in Ukraine, prices are rising rapidly.
“It’s a shame because the central bank could raise interest rates too quickly and [set them] too high,” said Professor Moshirian.
“So it’s a reaction to external shocks from the food supply, which are happening all over the world especially for poor countries.”
He warned it could lead to a recession.
“And some central banks … if they can’t get over it, they expect a recession to basically slow the economy down,” Professor Moshirian said.
Yixiao Zhou of ANU’s Crawford School of Public Policy agrees that developing countries will be hardest hit by inflation, citing Sri Lanka as an example.
“Their economy could suffer more [than developed nations’] from this run of inflation,” he told the ABC.
It can also lead to a deteriorating exchange rate and problems with servicing external debt.
Turkey is facing very high inflation because of the open political decisions made by the country’s President, Recep Tayyip Erdogan, Professor Moshirian said.
“They’re just made to keep interest rates low,” he said.
“But when they keep interest rates low and prices continue to rise, the value of their currency goes down and contributes to more inflation because of the price of imports, which become more expensive.
“It was an unfortunate government intervention that shouldn’t have happened.”
Which country is better?
Developed countries with cautious central banks have fared the best, Professor Moshirian said.
“Which country does better depends on which country’s central bank is very much in tune with actual economic realities,” he said.
He said it would be determined which central bank would manage inflation effectively, so that their country would not have to go into a recession.

He cites Australia, Europe, Japan and Canada as examples.
But he warned this would depend on future developments and how they handle inflation over the next six to 12 months.
Dr Zhou said it was difficult to identify countries that had done better, but pointed to Japan and China as outliers that were not as badly affected as the others.
“China’s macroeconomic conditions are quite different from other countries,” he said.
“It has absolutely no inflationary pressure right now.”
Dr Zhou said Australia’s situation is common in developed countries, such as the US, South Korea, Germany and other European countries.
“It’s nothing too special anyway,” he said.
Professor Moshirian points to Canada having a similar situation to Australia.
“In Canada, they have basically the same problem as us, and that is a supply chain problem, oil prices have gone up and put pressure on their inflation,” he said.
“Their central bank also has to act. They have to chase to raise interest rates.”
Professor Moshirian said the current situation was very fluid and about three months of data was needed to give a more complete picture of how things were.
“All central banks in the Western world are effectively raising interest rates,” he said.
“They are trying to respond.
“We won’t know how well it works until a few more months.”

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