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Inflation round-up

In Britain, almost nobody wants to talk about Brexit. Those who voted to leave the EU in 2016 have been stunned into embarrassed silence by Brexit's dismal failure to bring significant benefits, while the regular havoc it causes for businesses has left those who voted to remain quietly thinking "I told you so". Meanwhile, politicians on all sides fear opening old wounds and wasting political capital on something that seems too hard to fix.

Unfortunately, ignoring the many problems Brexit has brought won't stop it bringing more. Leaving the EU has already increased inflationary pressures in the United Kingdom several times. In the aftermath of the referendum, the pound plummeted in value, raising import costs. As numbers of immigrant workers from the EU fell, labour shortages caused wages in several sectors of the British economy to jump, and salary growth is still outstripping general price inflation. Now, with the much-delayed Brexit trade border having finally been put in place on 30 April, the arguably-excessive administrative fees imposed threaten to lift prices of numerous EU imports in Britain. Indeed, the extra costs and hassle seem likely to persuade at least some EU exporters not to bother shipping to the UK at all, where shortages of affected goods could raise prices further.

Despite these impacts (and some rapid rises in rental costs), the UK's annual inflation rate remains manageable at a latest reading of 3.2%, but the main thing keeping it down is the economy's weak domestic demand and GDP growth. Brexit is a major factor behind these trends containing the cost of living, but they can hardly be described as 'dividends'. 

High-inflation countries (annual CPI 10%+)

Country CPI % Data month Trend IMF 2024 forecast %
Angola 28.2 Apr-24 ▲ Rising 22.0
Argentina 289.4 Apr-24 ▲ Rising 249.8
Burundi 14.0 Mar-24 ▼ Falling 22.0
Congo DR 46.8 Dec-23 ▲ Rising 17.2
Cuba 31.3 Dec-23 ► Steady n/a
Egypt 32.5 Apr-24 ▼ Falling 32.5
Ethiopia 23.3 Apr-24 ▼ Falling 25.6
Gambia 14.9 Mar-24 ▼ Falling 15.1
Ghana 25.0 Apr-24 ► Steady 22.3
Haiti 26.7 Mar-24 ▲ Rising 23.0
Iran 35.8 Feb-24 ▼ Falling 37.5
Laos 24.9 Apr-24 ► Steady 21.5
Lebanon 70.4 Mar-24 ▼ Falling n/a
Liberia 10.5 Jan-24 ► Steady 6.3
Malawi 31.8 Mar-24 ► Steady 27.9
Myanmar 28.6 Jun-23 ▲ Rising 15.0
Nigeria 33.2 Mar-24 ▲ Rising 26.3
Pakistan 17.3 Apr-24 ▼ Falling 24.8
Sierra Leone 41.7 Mar-24 ▼ Falling 39.1
South Sudan 22.5 Mar-24 ▲ Rising 54.8
Surinam 26.8 Mar-24 ▼ Falling 20.7
Syria 139.6 Dec-23 ▼ Falling n/a
Turkey 69.8 Apr-24 ► Steady 59.5
Venezuela 67.8 Mar-24 ▼ Falling 100.0
Zambia 13.8 Apr-24 ► Steady 11.4
Zimbabwe 57.5 Apr-24 ▲ Rising 561.0

Argentina has the highest inflation in the world and it continues to rise, reaching an annual rate of 289.4% in April (see table above). The cost of living has risen so fast and for so long that existing banknotes are becoming increasingly valueless. To help consumers cope with cash purchases, the central bank this month introduced 10,000-peso notes into circulation. They are five times the value of the next largest note available, but even they are worth only USD 11 at current exchange rates. How long before a 20,000-peso note is needed?

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