It won't have escaped anyone's attention that inflation is rising across the world. What is less obvious is that, in most countries, the upward trend is being driven by an unusually concentrated set of prices; in other words, a handful of prices is driving most of the inflation.
The exact set of prices driving inflation differs between countries and regions. Food is a more potent driver in emerging markets, for instance, than it is in the richer world. However, almost every country has two items with soaring prices in common currently: fuel and energy.
The fact that inflation is so concentrated suggests it may soon begin to fall. In the meantime, though, the challenges it presents for global mobility teams are already apparent, especially as both fuel and energy prices have the potential for particularly big impacts. ECA's September 2021 Cost of Living Survey is published this month and will show the extent of the impact on expatriate purchasing power, but this is unlikely to be excessive for the simple reason that fuel and energy prices are rising everywhere and assignee cost of living adjustments depend on comparison between home and host locations.
The bigger impact of soaring fuel and energy prices will be felt by companies that meet motoring and household heating costs for assignees. With 76% of international employers providing car benefits in some form (the vast majority meeting fuel costs) and 40% paying utilities bills, according to our latest Benefits for International Assignments report, the jump in costs for many is likely to be considerable.
High-inflation countries (annual CPI 10%+)
Country |
CPI % |
Data month |
Trend |
IMF 2022 forecast % |
Angola |
30.2 |
Sep-21 |
▲ Rising |
14.9 |
Argentina |
52.5 |
Sep-21 |
▲ Rising |
n/a |
Belarus |
10.2 |
Sep-21 |
▲ Rising |
8.2 |
Brazil |
10.2 |
Sep-21 |
▲ Rising |
5.3 |
Burundi |
10.5 |
Sep-21 |
► Steady |
4.6 |
Ethiopia |
34.8 |
Sep-21 |
▲ Rising |
n/a |
Georgia |
12.8 |
Oct-21 |
► Steady |
5.4 |
Ghana |
10.6 |
Sep-21 |
▲ Rising |
8.8 |
Guinea |
13.1 |
Sep-21 |
▲ Rising |
9.9 |
Haiti |
12.2 |
Jul-21 |
▼ Falling |
15.5 |
Iran |
43.7 |
Sep-21 |
► Steady |
27.5 |
Kyrgyzstan |
13.5 |
Sep-21 |
▼ Falling |
7.8 |
Lebanon |
144.1 |
Sep-21 |
▲ Rising |
n/a |
Nigeria |
17.2 |
Sep-21 |
▼ Falling |
13.3 |
Seychelles |
10.5 |
Aug-21 |
► Steady |
3.7 |
Sierra Leone |
11.6 |
Sep-21 |
▲ Rising |
13.3 |
Sudan |
365.8 |
Sep-21 |
▼ Falling |
41.8 |
Surinam |
58.8 |
Aug-21 |
▲ Rising |
31.7 |
Turkey |
19.6 |
Sep-21 |
▲ Rising |
15.4 |
Turkmenistan |
10.0 |
Dec-20 |
▼ Falling |
13.0 |
Ukraine |
11.0 |
Sep-21 |
▲ Rising |
7.1 |
Uzbekistan |
10.8 |
Sep-21 |
► Steady |
10.9 |
Venezuela |
1946.0 |
Sep-21 |
▼ Falling |
2000.0 |
Zambia |
21.1 |
Oct-21 |
▼ Falling |
19.2 |
Zimbabwe |
54.5 |
Oct-21 |
► Steady |
30.7 |
Belarus, Brazil and Ghana joined our double-digit-inflation list this time (see table above). It has certainly grown longer in recent months. However, in most cases, the IMF's new 2022 forecasts (in the right-hand column) point to lower inflation next year.
Our regular watchlist below is also somewhat shorter, with a significant number of countries that appeared last time having seen official inflation fall back down.
On watch! (notable rise in inflation, but below 10%)
Country |
Latest CPI % |
Data month |
Up from |
Armenia |
9.1 |
Oct-21 |
6.5% Jun-21 |
Azerbaijan |
8.5 |
Sep-21 |
6.7% Aug-21 |
Egypt |
6.6 |
Sep-21 |
5.5% Jul-21 |
El Salvador |
5.0 |
Sep-21 |
3.5% Jul-21 |
Estonia |
7.0 |
Oct-21 |
5.0% Aug-21 |
Jamaica |
8.3 |
Sep-21 |
5.4% Jul-21 |
Latvia |
6.1 |
Oct-21 |
4.8% Sep-21 |
Lithuania |
6.3 |
Sep-21 |
5.3% Aug-21 |
Moldova |
6.7 |
Sep-21 |
4.7% Aug-21 |
Mongolia |
9.6 |
Sep-21 |
7.4% Jul-21 |
Nicaragua |
5.9 |
Sep-21 |
4.1% Jul-21 |
Paraguay |
7.6 |
Oct-21 |
5.6% Aug-21 |
Peru |
5.8 |
Sep-21 |
4.0% Jul-21 |
Romania |
6.3 |
Sep-21 |
5.2% Aug-21 |
Russia |
7.4 |
Sep-21 |
5.5% Apr-21 |
Serbia |
5.7 |
Sep-21 |
4.3% Aug-21 |
In other inflation news, Kuwait has finally set a date, 1 January 2023, for implementing a 5% sales tax (VAT), in line with the Gulf Cooperation Council agreement of 2016 which originally slated January 2018 as the implementation date. All GCC members except Kuwait and Qatar (which hopes to implement sometime in 2022) have now introduced the tax. Bahrain will double its VAT to 10% in January 2022.
Finally, given that China has, like the rest of the world, seen a big jump in energy prices (13% yoy), one might expect its official annual inflation rate (1.5% at end-October) to be higher. However, elevated energy and fuel costs have been offset by a 44% yoy fall in pork prices. For foreign staff in China, who tend to eat considerably less pork than the average local national there, higher cost of living from energy and fuel factors might not be so offset.