Global Inflation Index

By looking at OECD data, we ranked the countries with the highest current inflation rates across 38 OECD member countries, based on inflation increases between December 2021 and December 2022.

1. Japan

Inflation Increase: 400%

Japan had the biggest increase in total inflation out of the 38 OECD member countries analysed. The total annual inflation rate in Japan rose to 4.0% in December 2022, which is the highest it has been since December 1981. Increasing price pressures came from all components, especially food (7.22% vs 2.53% in 2021), and total inflation increased from 0.8% in December 2021 to 4% in December 2022 – an increase of 400%.

Japan’s weakening currency has led to the country’s rising inflation, as it accelerated import costs which had already risen due to the crisis in Ukraine. According to the Teikoku Databank, prices for more than 10,000 food items are set to go up by an average of 13% this year.

2. Portugal

Inflation Increase: 249.57%

Portugal witnessed the second-highest increase in total inflation between 2021 and 2022, with the year-on-year inflation rate at 9.6%, an increase of 249.57%. This included energy (11.18% vs 20.81%), and food prices (2.88% vs 19.91%). The total inflation increased from 2.74% to 9.59%.

In January 2023, the European Central Bank (ECB) scrutinised Portugal’s support package for families and businesses and warned that across-board crisis support could increase inflation further.

3. Sweden

Inflation Increase: 218.89%

Sweden saw the third highest increase in inflation within the last year, with the December 2022 rate at 12.3%, an increase of 218.89% from the previous year when it was at 3.09%. Sweden witnessed the biggest increase in its food prices, when in December 2021 the consumer price index (CPI) was at 1.72% and rose to 18.24% in 2022.

Reuters revealed that consumer prices rose more than expected in December, hitting double figures and a 30-year high, which put pressure on the central bank to lift interest rates even higher.

Inflation in Sweden, coincidentally, accelerated as the pandemic caused disruptions in supply and transport, which fuelled prices. The crisis in Ukraine also caused a surge in inflation.

4. Denmark

Inflation Increase: 181.90%

Denmark witnessed the fourth highest inflation hike within the last year, with the December 2022 rate hitting 8.7%, an increase of 181.90% to the previous year when it was at 3.1%. Denmark saw the largest increase in its food prices (1.64% vs 14.88% in 2022), and the hikes were due to rallying agriculture products fuelling inflation. Surging energy costs and gas prices have also caused rising electricity bills.

5. Slovakia

Inflation Increase: 164.24%

Slovakia saw the fifth highest inflation hike out of 38 OECD countries, with the 2022 rate sitting at 15.38%, an increase of 164.24% from the previous rate of 5.82%. Slovakia’s energy prices saw a huge hike in the time period, rising from 2.11% to 17% in 12 months. As Slovakia is a member of the Eurozone, the country has fewer tools to fight inflation, as the exchange rate cannot be pushed higher to moderate consumer prices.

After discussing the countries with the highest inflation increase in the last year, we will now explore the OECD countries that are forecasted to have the highest and lowest inflation in the fourth quarter of 2023, according to OECD data.

It is important to recognise that the data used in inflation predictions can change in importance. Falling unemployment used to be a good guide to predicting inflation, but recently the labour market has changed – with low wage growth despite falling employment.

There have also recently been unexpected shocks in the global economy, such as the covid pandemic and international conflicts, and large international economies are too complex to include all factors in our data models. Overall, the track record for predicting inflation has not been particularly good, as forecasters tend to go for conservative predictions and miss the big swings.

It is, therefore, difficult to know the impact of monetary policy. For example, if interest rates rise, will consumers respond by cutting spending?

1. Czech Republic

Inflation Increase in 2023: 23.70%

According to OECD data, inflation in the Czech Republic is forecasted to grow from 6.61% in December 2022 to 8.18% in the last quarter of 2023, an increase of 23.70%. The Executive Board of the International Monetary Fund (IMF) revealed that the crisis in Ukraine has greatly affected the Czech Republic’s recovery from the pandemic. Growth is expected to rebound by the end of 2024, driven by consumption and exports.

2. Israel

Inflation Increase in 2023: 15.95%

Inflation in Israel is forecasted to grow from 5.26% in December 2022 to 6.10% in the last quarter of 2023, which is an increase of 15.95%. The Bank of Israel governor revealed that inflation pressure is expected to ease gradually, at a slower pace than forecast. It is expected that it will gradually move to 2% by 2024.

3. China

Inflation Increase in 2023: 11.11%

The OECD revealed that inflation in China is forecasted to increase from 1.80% in December 2022 to 2% at the end of 2023, which is an increase of 11.11%.

We will now explore the OECD countries which are forecasted to have the highest and lowest inflation in the fourth quarter of 2024, according to OECD data.

1. China

Inflation Increase in 2024: 11.11%

China is forecasted to have the only inflation increase in the last quarter of 2024, but the rate of inflation is likely to remain at 2%. The current inflation rate as of December 2022 is 1.8% but is likely to rise by 11.11%.

2. Israel

Inflation Decrease in 2024: -9.89%

According to OECD data, Israel is forecast to see a drop in inflation before the end of 2024, by 9.89%. The current Israel inflation rate sits at 5.26%, and is likely to drop to 4.74% by the end of next year.

3. Spain

Inflation Decrease in 2024: -21.69%

Spain is also likely to see a drop in inflation by the end of 2024, at a rate of 21.69%. The current inflation rate in Spain sits at 5.70%, and is likely to fall to 4.47% by the last quarter of 2024. In January, Spain reported rising rates of inflation, as it increased unexpectedly after slowing down for five months.

We will now discuss the countries likely to see the biggest drop in inflation by the end of 2023, according to OECD data sets.

1. Latvia

Inflation Decrease in 2023: -72.45%

Latvia is the country where inflation is likely to drop the most, decreasing by possibly 72.45%. The current inflation rate in Latvia sits at a high margin of 20.83% and is forecast to drop to 5.74% by the end of 2023, subject to economic conditions.

2. Sweden

Inflation Decrease in 2023: -71.29%

Sweden is forecast to have the second biggest decrease in inflation behind Latvia, with a decrease of 71.29%. The current inflation rate in Sweden is at 12.34% and is forecast to drop to 3.54% by the end of 2023.

3. Estonia

Inflation Decrease in 2023: -71.12%

Estonia is forecast to have the third biggest inflation decrease, with a drop of 71.12% in its inflation rate. Currently, the inflation rate sits at 17.62%, and is expected to fall to 5.09% by the end of the year.

Now we will explore which countries are forecasted to witness the biggest decrease in inflation rates by the end of 2024.

1. Estonia

Inflation Decrease in 2024: -88.57%

Inflation rates in Estonia are likely to drop even more by the end of 2024, with a drop of 88.57%. Currently, the inflation rate in December 2022 sat at 17.62%, and is forecast to further by the end of next year to 2.02%. In Estonia, a country close to the crisis zone of Ukraine, inflation remains high at 17%, but is forecast to slow down by the end of the year.

2. Lithuania

Inflation Decrease in 2024: -88.34%

Lithuania is forecast to drop its inflation rates by the end of 2024 by a rate of 88.34%. Currently, Lithuania’s inflation rate (CPI) sits at 21.73%, and is expected to fall to 3.19% in the next year.

3. Sweden

Inflation Decrease in 2024: -82.97%

Sweden is forecast to be the country with the third biggest decrease in inflation in 2024, with a fall of 82.97%. Currently in Sweden, the inflation rate sits at 12.33% and is likely to drop to 2.10% by the end of next year.

Methodology

The Countries with the Biggest Increase in Inflation

Data was taken from OECD’s Prices for Inflation (CPI) selecting the 38 member countries’ total inflation as well as food and energy.

The Countries with the Highest Inflation Forecast

Data was collected from OECD’s Inflation forecast for all years available. Only 2023 and 2024 data was collected for this section.