Real Assets
Which Countries Have the Lowest Inflation?
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, 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 above infographic 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.
Real Assets
De-Dollarization: More Countries Seek Alternatives to the U.S. Dollar
The U.S. dollar is the dominant currency in the global financial system, but some countries are following the trend of de-dollarization.

De-Dollarization: More Countries Seek Alternatives to the U.S. Dollar
The U.S. dollar has dominated global trade and capital flows over many decades.
However, many nations are looking for alternatives to the greenback to reduce their dependence on the United States.
This graphic catalogs the rise of the U.S. dollar as the dominant international reserve currency, and the recent efforts by various nations to de-dollarize and reduce their dependence on the U.S. financial system.
The Dollar Dominance
The United States became, almost overnight, the leading financial power after World War I. The country entered the war only in 1917 and emerged far stronger than its European counterparts.
As a result, the dollar began to displace the pound sterling as the international reserve currency and the U.S. also became a significant recipient of wartime gold inflows.
The dollar then gained a greater role in 1944, when 44 countries signed the Bretton Woods Agreement, creating a collective international currency exchange regime pegged to the U.S. dollar which was, in turn, pegged to the price of gold.
By the late 1960s, European and Japanese exports became more competitive with U.S. exports. There was a large supply of dollars around the world, making it difficult to back dollars with gold. President Nixon ceased the direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.
Although it has remained the international reserve currency, the U.S. dollar has increasingly lost its purchasing power since then.
Russia and China’s Steps Towards De-Dollarization
Concerned about America’s dominance over the global financial system and the country’s ability to ‘weaponize’ it, other nations have been testing alternatives to reduce the dollar’s hegemony.
As the United States and other Western nations imposed economic sanctions against Russia in response to its invasion of Ukraine, Moscow and the Chinese government have been teaming up to reduce reliance on the dollar and to establish cooperation between their financial systems.
Since the invasion in 2022, the ruble-yuan trade has increased eighty-fold. Russia and Iran are also working together to launch a cryptocurrency backed by gold, according to Russian news agency Vedmosti.
In addition, central banks (especially Russia’s and China’s) have bought gold at the fastest pace since 1967 as countries move to diversify their reserves away from the dollar.
How Other Countries are Reducing Dollar Dependence
De-dollarization it’s a theme in other parts of the world:
- In recent months, Brazil and Argentina have discussed the creation of a common currency for the two largest economies in South America.
- In a conference in Singapore in January, multiple former Southeast Asian officials spoke about de-dollarization efforts underway.
- The UAE and India are in talks to use rupees to trade non-oil commodities in a shift away from the dollar, according to Reuters.
- For the first time in 48 years, Saudi Arabia said that the oil-rich nation is open to trading in currencies besides the U.S. dollar.
Despite these movements, few expect to see the end of the dollar’s global sovereign status anytime soon. Currently, central banks still hold about 60% of their foreign exchange reserves in dollars.
Real Assets
Charted: 30 Years of Central Bank Gold Demand
Globally, central banks bought a record 1,136 tonnes of gold in 2022. How has central bank gold demand changed over the last three decades?

30 Years of Central Bank Gold Demand
Did you know that nearly one-fifth of all the gold ever mined is held by central banks?
Besides investors and jewelry consumers, central banks are a major source of gold demand. In fact, in 2022, central banks snapped up gold at the fastest pace since 1967.
However, the record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold.
The above infographic uses data from the World Gold Council to show 30 years of central bank gold demand, highlighting how official attitudes toward gold have changed in the last 30 years.
Why Do Central Banks Buy Gold?
Gold plays an important role in the financial reserves of numerous nations. Here are three of the reasons why central banks hold gold:
- Balancing foreign exchange reserves
Central banks have long held gold as part of their reserves to manage risk from currency holdings and to promote stability during economic turmoil. - Hedging against fiat currencies
Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation. - Diversifying portfolios
Gold has an inverse correlation with the U.S. dollar. When the dollar falls in value, gold prices tend to rise, protecting central banks from volatility.
The Switch from Selling to Buying
In the 1990s and early 2000s, central banks were net sellers of gold.
There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment.
Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis.
Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021:
Rank | Country | Amount of Gold Bought (tonnes) | % of All Buying |
---|---|---|---|
#1 | 🇷🇺 Russia | 1,888 | 28% |
#2 | 🇨🇳 China | 1,552 | 23% |
#3 | 🇹🇷 Türkiye | 541 | 8% |
#4 | 🇮🇳 India | 395 | 6% |
#5 | 🇰🇿 Kazakhstan | 345 | 5% |
#6 | 🇺🇿 Uzbekistan | 311 | 5% |
#7 | 🇸🇦 Saudi Arabia | 180 | 3% |
#8 | 🇹🇭 Thailand | 168 | 2% |
#9 | 🇵🇱 Poland | 128 | 2% |
#10 | 🇲🇽 Mexico | 115 | 2% |
Total | 5,623 | 84% |
Source: IMF
The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period.
Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014.
Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar.
Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework.
Which Central Banks Bought Gold in 2022?
In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion.
Country | 2022 Gold Purchases (tonnes) | % of Total |
---|---|---|
🇹🇷 Türkiye | 148 | 13% |
🇨🇳 China | 62 | 5% |
🇪🇬 Egypt | 47 | 4% |
🇶🇦 Qatar | 33 | 3% |
🇮🇶 Iraq | 34 | 3% |
🇮🇳 India | 33 | 3% |
🇦🇪 UAE | 25 | 2% |
🇰🇬 Kyrgyzstan | 6 | 1% |
🇹🇯 Tajikistan | 4 | 0.4% |
🇪🇨 Ecuador | 3 | 0.3% |
🌍 Unreported | 741 | 65% |
Total | 1,136 | 100% |
Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States.
Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022.
According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.
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