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Inflation round-up

As Argentina's inflation rate continues to rise, it is increasingly obvious that some of the country's policies are working against each other in the battle to reduce cost of living. Under pressure from investors and creditors, including the International Monetary Fund, to repair finances, the Central Bank has raised interest rates to record highs, thereby dampening borrowing and domestic demand in an attempt to lower price pressures. Meanwhile, the Buenos Aires government has cut numerous subsidies, which has lifted relevant prices enormously. Currently, Argentina's is the third highest inflation rate in the world and the chances of it falling much are slim while such conflicting factors persist.

Venezuela has the world's highest inflation rate, of course, with the opposition-led National Assembly putting it at 2.69 million percent in February. Given the political - and practical! - chaos the country is going through, however, this figure is likely to be little more than a guess and may be politically motivated to some degree. There is no doubt, though, that inflation is very high indeed. On the other hand, bizarrely, fuel for vehicles is virtually free - if you can find it.

Zimbabwe's inflation jumped higher again, to 59.4% in February. We've been critical recently about the currency reforms the government has made to try to stabilise the economy, but although the year-on-year inflation rate continues to rise, the month-on-month figure slowed in the latest reading, providing hope that the cost of living can be contained.

Uzbekistan has joined our high-inflation countries table, but largely on a technicality! Its inflation was probably above 14% throughout 2018 but, despite the government making significant reforms and improving the investment environment in recent years, as yet an official inflation rate is still only given once a year. At ECA we like our data to be as up-to-date as possible, so we haven't included the 2017 reading, which was 14.3%, for several months now.

There are no other additions to the table, but long-time member Malawi has left the club as its inflation has fallen under 10%:

High-inflation countries (CPI 10%+)
Country CPI % Last reported Trend IMF 2019 forecast
Angola 17.8 Feb-19 ► Stable 15.8
Argentina 51.3 Feb-19 ▲ Rising 31.7
Egypt 14.4 Feb-19 ▲ Rising 14.0
Ethiopia 10.9 Feb-19 ► Stable 9.5
Haiti 15.5 Jan-19 ► Stable 11.6
Iran 39.6 Jan-19 ▲ Rising 34.1
Liberia 28.5 Dec-18 ▲ Rising 24.5
Nigeria 11.3 Feb-19 ▼ Falling 13.5
Sierra Leone 17.1 Jan-19 ▼ Falling 13.1
South Sudan 40.1 Dec-18 ▼ Falling 91.4
Sudan 44.3 Feb-19 ▼ Falling 49.2
Turkey 19.7 Feb-19 ▼ Falling 16.7
Uzbekistan 14.3 Dec-18 ► Stable 14.9
Venezuela 2688670.0 Jan-19 ▲ Rising 10 000 000.0
Zimbabwe 59.4 Feb-19 ▲ Rising 9.6

Price pressures in Pakistan are rising notably, as our watch-list below shows, but not as fast as seemed likely when the rupee was devalued in June last year. Nevertheless, some independent analysts have questioned official figures and say food price inflation, for instance, is closer to 20%, although the government insists its data is accurate. 

On watch! (notable rise in inflation, but below 10%)
Country Latest CPI % Data month Up from
Belarus 6.2 Feb-19 5.0% Nov-18
Pakistan 8.2 Feb-19 6.2% Dec-18
Russia 5.2 Feb-19 3.8% Nov-18

Finally, in other inflation-related news, Qatar has confirmed it will introduce 5% sales tax (VAT) in January 2020.

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