Australian Economy

Which countries are being hit hardest by inflation and how does Australia compare?

Australians are feeling the pinch from inflation, but in some parts of the world the rate is almost 11 times higher, causing a massive jump in the price of goods. 

According to the Reserve Bank of Australia, the country’s inflation rate is sitting at about 5 per cent. 

In comparison, Turkey is dealing with one of the world’s highest rates of inflation, which at the moment is about 54 per cent, Fariborz Moshirian, director of the institute of global finance at the University of New South Wales, told the ABC.

Sri Lanka, where protests over food and fuel shortages have pushed the President to flee the country, has inflation levels of almost 55 per cent.

Brazil and Argentina have inflation ranging from 10 to 15 per cent. And in Russia, inflation is running between 10 and 14 per cent, according to Professor Moshirian.

“There are some parts of the world where you don’t necessarily have accurate data about inflation, but that’s where you need to be more concerned, like Africa,” he said.

According to Professor Moshirian, most European countries have inflation ranging between 5 per cent and 7.5 per cent.

He singled out Greece and Italy as having high rates of inflation, at 12 per cent and about 7 per cent respectively.

Scandinavian countries had managed to keep theirs between 2.5 and 5 per cent, he said.

Developing countries to be worst hit

A food street vendor pushes his trolley across cobblestones.
Inflation is particularly high in Turkey due to political decisions, Professor Moshirian says.(AP: Francisco Seco)

Professor Moshirian said people in countries where income was low would be impacted by inflation the most.

“If you have got only $200 a week to spend and you spend all your $200 for food and fruits and basic needs, and if that goes up by, say, 10 per cent [or] 20 per cent, you basically have $10 or $20 less to spend,” he said.

“Whereas if I have got $2,000 a week and my cost of food and basic needs are only $200, it wouldn’t be affecting me as much as say someone else whose income is only $200.”

And Professor Moshirian warned rising inflation rates would have consequences beyond immediate economics.

He said it would impact families, increase tensions and affect people’s physical and mental health, especially when “parents cannot provide adequate food on the table for children”.

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