October cost-of-living round-up

He's ba-ack! And if Donald Trump keeps his promises once he takes over as President of the United States of America again in January, be prepared for a new bout of global inflation. The huge tariffs Trump has threatened to levy on imports from China, the European Union and elsewhere would surely spark retaliation and a damaging trade war, which would put prices up across the world. Indeed, a trade war is already smouldering, as it has been since Trump last took office in 2017, when he first launched trade tariffs, albeit more moderately. With the EU adding fuel to the fire in October by imposing 45% tariffs on Chinese electric vehicles, together with last night's election result, this is a conflict that could truly ignite.

Bangladesh brought its annual consumer price inflation below 10% last month and has left our high-inflation table (see first table below). This was despite devastating floods in August and October destroying so much rice that the country is having to rely on imports, sending rice prices soaring there. Niger also brought its inflation down to single figures. Other than that, the list is unchanged.

Zambia's inflation rose to a three-year high in October, also because of higher food costs resulting from extreme weather events; in this case a prolonged drought. Electricity prices are also rising fast. Egypt, meanwhile, cut fuel subsidies for the third time this year, a move which will help the government get its finances under control but which is sure to keep inflation elevated.

Surinam and Zimbabwe both made our biggest currency losses table (see next table) for the second month in a row as their exchange rate slumps continue. The Venezuelan bolivar was October's other big loser; a worrying sign for such a tightly-controlled currency and a move which could rekindle inflation.

The Angolan kwanza and the Sri Lankan rupee were the world's strongest currencies in October (see next table). In both cases, the upward moves were largely market corrections after recent losses.

Three countries appear to be at heightened risk of major devaluations in the short-to-medium term. Argentina, whose president, Javier Milei, recently announced his plan to adopt a flexible peso once capital controls are lifted, would surely need to allow a big devaluation in order to achieve this. Bolivia, meanwhile, is going through a long economic crisis which is making its currency peg to the US dollar less and less affordable and possibly needing to be abandoned. And Ethiopia, which a few months ago said it had 'floated' the birr but is in fact continuing to control its value, is in danger of needing to once again devalue the official exchange rate as divergence with black-market rates accelerates. As always, we will continue to monitor these and all other cost-of-living issues around the globe.

If you need advice about cost of living for your expatriate staff anywhere in the world, or indeed about any other aspect of global mobility, do please get in touch.

Finally, here is this month's selected currency movements table: