Price increase

Inflation rates in a global comparison

The prices of consumer goods are determined and evaluated annually in almost all countries. If prices are higher than in the previous year, this is known as inflation. If they are lower, it is deflation. This calculated inflation rate is an essential component of monetary stability.

In 2021, the global inflation rate was 3.4 percent. In the European Union, it was 2.6 percent. For the United States, a year-on-year price increase of 4.7 percent was determined. Significantly higher values are expected worldwide for 2022.
Inflation rates by country

Inflation rates 2021 in comparison

Rwanda9.9 %-0.4 %
Japan0.0 %-0.2 %
Ecuador-0.3 %0.1 %
Switzerland-0.7 %0.6 %
Bolivia0.9 %0.7 %
China2.4 %1.0 %
Greece-1.2 %1.2 %
Thailand-0.8 %1.2 %
Portugal0.0 %1.3 %
Morocco0.7 %1.4 %
Israel-0.6 %1.5 %
Indonesia1.9 %1.6 %
Hong Kong0.3 %1.6 %
France0.5 %1.6 %
Vietnam3.2 %1.8 %
Denmark0.4 %1.9 %
Italy-0.1 %1.9 %
Albania1.6 %2.0 %
Sweden0.5 %2.2 %
Finland0.3 %2.2 %
Cameroon2.4 %2.3 %
Qatar-2.5 %2.3 %
Singapore-0.2 %2.3 %
Ireland-0.3 %2.4 %
Montenegro-0.3 %2.4 %
Belgium0.7 %2.4 %
Malaysia-1.1 %2.5 %
South Korea0.5 %2.5 %
United Kingdom1.0 %2.5 %
Luxembourg0.8 %2.5 %
Netherlands1.3 %2.7 %
Austria1.4 %2.8 %
Australia0.8 %2.9 %
Cambodia2.9 %2.9 %
Saudi Arabia3.4 %3.1 %
Spain-0.3 %3.1 %
Germany0.5 %3.1 %
Bulgaria1.7 %3.3 %
Canada0.7 %3.4 %
Norway1.3 %3.5 %
Colombia2.5 %3.5 %
Laos5.1 %3.8 %
Niger2.9 %3.8 %
Czechia3.2 %3.8 %
Mali0.4 %3.9 %
New Zealand1.7 %3.9 %
Mauritius2.6 %4.0 %
Serbia1.6 %4.1 %
Nepal5.1 %4.1 %
Ivory Coast2.4 %4.1 %
Guatemala3.2 %4.3 %
Peru2.0 %4.3 %
Iceland2.8 %4.4 %
Honduras3.5 %4.5 %
Papua New Guinea4.9 %4.5 %
Chile3.0 %4.5 %
South Africa3.2 %4.6 %
Estonia-0.4 %4.7 %
Lithuania1.2 %4.7 %
United States1.2 %4.7 %
Paraguay1.8 %4.8 %
Nicaragua3.7 %4.9 %
Guyana1.0 %5.0 %
Romania2.6 %5.1 %
Poland3.4 %5.1 %
Moldova3.8 %5.1 %
Hungary3.3 %5.1 %
Bangladesh5.7 %5.5 %
Mexico3.4 %5.7 %
Tunisia5.6 %5.7 %
Iraq0.6 %6.0 %
Lesotho5.0 %6.0 %
Kenya5.4 %6.1 %
Azerbaijan2.8 %6.7 %
Russia3.4 %6.7 %
Mongolia3.7 %7.1 %
Armenia1.2 %7.2 %
Algeria2.4 %7.2 %
Botswana1.9 %7.2 %
Bhutan5.6 %7.3 %
Gambia5.9 %7.4 %
Uruguay9.8 %7.7 %
Dominican Republic3.8 %8.2 %
Brazil3.2 %8.3 %
Burundi7.3 %8.4 %
Belarus5.5 %9.5 %
Pakistan9.7 %9.5 %
Georgia5.2 %9.6 %
Ghana9.9 %10.0 %
Sierra Leone13.4 %11.9 %
Guinea10.6 %12.6 %
Haiti22.8 %16.8 %
Turkey12.3 %19.6 %
Suriname34.9 %59.1 %
Lebanon84.9 %154.8 %

Price increase in a country comparison

Inflation is determined here on the basis of the consumer price index. In addition to this, there are other indices based on other target groups. In these indices, a typical national basket of goods is filled with everyday products and their prices are observed over a period of many years. Usually, there are several hundred types of goods in such a basket, which are occasionally exchanged depending on technical progress or changing living standards. The more a normal household spends on an item, the more it is weighted. Coffee or stamps, for example, usually have only a very small share, while the price of electricity is much more clearly included in this basket of goods.

Within the European Union and the European Free Trade Association (EFTA), this calculation method is harmonized (HICP = Harmonized Index of Consumer Prices), so all member countries use the same evaluation scheme, making the inflation rate very comparable. Understandably, the weighting of the individual products must differ, since, for example, heating costs in Norway account for a completely different proportion of annual expenditure than in the southern, warmer countries.

The highest inflation rate in recent years was achieved in Venezuela in 2018. The inflation rate there was 130,060 percent.

Inflation increase since 2021

Inflation has risen significantly, particularly in the years 2021 to 2022. The main reason for this was energy prices, which not only have a direct impact on consumers in the form of electricity and heating costs, but also make the production of goods more expensive. In 2022, this was compounded by the Ukraine war, which led to a sudden increase in heating costs as a result of gas supply stoppages.

Price increase

Perceived inflation

In contrast to inflation measured statistically and by government agencies, perceived inflation is always somewhat more drastic. This is mainly due to the fact that people perceive a price increase much earlier and more intensively than a price reduction. The frequency of shopping also plays a role. For example, we notice higher prices in the supermarket much more often than when we buy a television once. In addition, our brain plays a little trick on us: The published inflation figures always apply only to the past period of 1 year. However, the brain mixes its impressions and memories from several past years.

The optimal inflation

A low inflation is quite healthy, because the inflation rate (and other factors) is also used to measure economic performance. If inflation were 0%, the economy would hardly grow at all. Depending on whom you ask, the optimal inflation rate is considered to be between 0 and 4 percent. The higher the inflation, the more safety margin there would be from the "zero interest rate limit," which the EU has already had to fall below in the years 2021-2022. In such a case, the central banks hardly have a chance to take compensatory measures by lowering the key interest rate. From the consumer's point of view, on the other hand, it is better if the prices of daily necessities rise only very slightly.

The European Central Bank, the Federal Reserve Bank and also the Bank of Japan have been aiming for the 2% mark for years.

Historical development since 1980

Looking at the inflation trend over a longer period, the current 3.4 percent is still relatively moderate. Significant inflation rates have already occurred in the past. These were mainly in 1979/80 during the second oil crisis, in 1994 during the tequila crisis and during the banking and financial crisis from 2007. The highest global inflation rate since the middle of the last century was 14.0% in 1980.

Inflation development worldwide

      Worldwide       United States

Data basis: International Monetary Fund, World Bank and financial statistics of the individual countries. All data in the table are from the years 2020 - 2021. Earlier years can be shown in the map display if more recent data are not yet available. These year figures are then named there.
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