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Do you think inflation is high in India? These figures from other countries will shock you

Do you think inflation is high in India? These figures from other countries will shock you

While India's inflation is higher than 7 per cent for August, there are other countries whose inflation numbers would shock you. Check them out here.

The consumer price index-based inflation continued to stay above the Reserve Bank’s comfort level of 6 per cent for the eighth straight month in 2022. (Photo: Reuters) The consumer price index-based inflation continued to stay above the Reserve Bank’s comfort level of 6 per cent for the eighth straight month in 2022. (Photo: Reuters)

Rising inflation across the globe is a cause of concern including in India as price hike over time reduces the purchasing power of consumer. The country’s retail inflation moved higher to 7 per cent in August due to higher food prices. The figure stood at 6.71 per cent in July. The consumer price index-based inflation continued to stay above the Reserve Bank’s comfort level of 6 per cent for the eighth straight month in 2022. The figure stood at 5.66 per cent in December 2021.

The central bank has sounded cautious on inflation projection despite the recent correction in commodity prices and cumulative rate hikes of 140 basis points indicating the uncertainties. Vikas Garg, Head of Fixed Income, Invesco Mutual Fund believes that while the domestic inflation has peaked at 7.8 per cent in April 2022, its trajectory is still uncertain on geo-political risks and the quantum of a rate hike by the US FED and as such is expected to remain elevated, especially over next few months on energy prices.

Systematix Institutional Equities estimated that India’s retail inflation would remain sticky at around 7 per cent during the rest of FY23, a little higher than RBI’s estimate of 6.7 per cent.

While this number looks high, it fades when compared with inflation figures of other countries. Data available with Trading Economics showed that Zimbabwe’s inflation stood on the top at 285 per cent in August 2022. It was followed by Lebanon (168 per cent), Syria (139 per cent), Sudan (125 per cent) and Venezuela (114 per cent). Overall, the data further indicated that more than 100 countries have inflation higher than India.

Among the major economies in Asia, inflation in Sri Lanka stood at 64.30 per cent in August. Iran, Pakistan, Myanmar and Kazakhstan had inflation of 52.20 per cent, 27.26 per cent, 17.78 per cent and 16.1 per cent, respectively.

In the Americas, Colombia’s inflation was hovering around 10.84 per cent last month. Other major countries including Paraguay, Jamaica, Brazil and the United States hit inflation of 10.50 per cent, 10.2 per cent, 8.73 per cent and 8.3 per cent, respectively in August.

Meanwhile, Sweden, a Scandinavian nation of roughly 1.05 crore, has a reputation for being one of Europe’s most progressive states on Tuesday upped interest rates by 100 basis points, taking its policy rate to 1.75 per cent. It also warned that “inflation is too high.” The country’s inflation in August stood at 9.8 per cent.

Likewise, the US Federal Reserve will announce a rate hike decision on September 21. The market expects a minimum 75 basis points rate hike this time. In India, the next meeting of RBI’s MPC is scheduled during September 28-30 to decide on the next rate hike.

Saugata Bhattacharya, VP and Chief Economist, Axis Bank said, “Inflation remains a problem. I don’t think just a monetary policy response that is going to moderate this. It has to be coordinated with fiscal, trade and industry policy, even a diplomatic initiative using oil to tame inflation. Fortunately, in India, inflation is nowhere close to being the problem like the developed markets. Particularly in the US, it is not just a price inflation problem, but a wage inflation problem. So we are much better off and I think that is what is getting reflected in India’s attractiveness as an investment destination.”

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