A global perspective on what the cost-of-living crisis looks like around the world
Dear Editor,
The Global average inflation rate slowed to 6.8% in 2023, down from 8.7% in 2022, and is estimated to slow to 5.8% in 2024. In 2022, many other countries were still experiencing double- and triple-digit inflation rates, as shown above. The World Economic Forum reported that inflation rates have doubled in 35 out of 44 advanced countries over the past two years.
In the case of Guyana, the inflation rate remained in the low single digits. In 2023, for instance, the inflation rate slowed to 2%, below the estimated 5% (earlier in the fiscal year) for the year 2023, with an estimated 2.5% in 2024; thus, remaining below the global average (5.8%).
As demonstrated herein, the cost-of-living interventions pursued by the Government of Guyana with the aim of combatting rising prices amount to an estimated $332.2 billion annually, representing 8.5% of GDP.
More importantly to note is that, in contrast to other countries around the world, Guyana has confronted rising prices in a far more comprehensive manner than other larger advanced economies, such as the United States (1.7% of GDP), Japan (2.4% of GDP), Chile (0.7% of GDP), Indonesia (0.12% of GDP), Malaysia (4.2% of GDP), and Saudi Arabia (0.5% of GDP).
Sections of society and the media continue to be critical of the handling by the Government of Guyana (GoG) of the cost-of-living situation, and are calling on the Government to do more in this regard. However, a relatively in-depth global perspective on how other countries in the world are coping with the rising cost of living has to date been absent, save and except for “high level” perspectives. This is an important perspective to have in order to appreciate the gravity of the interventions by the GoG in response to the rising costs domestically, and other measures that the GoG is pursuing to address this situation in the short, medium, and long terms.
According to the International Rescue Committee (IRC), one of the severest inflation crises has led to economic collapse in Lebanon, with an increasing number of people being unable to afford their cost of living. Since 2019, Lebanon’s GDP has shrunk by 40%, while consumer prices continue to soar, reaching inflation rates of 170% for the year 2022. Prices for goods have risen, while the value of wages has fallen.
Countries with the
highest inflation rates since the pandemic are as follows:
* Zimbabwe – 314.5% (2023 est 193%)
* Venezuela – 360% (2023 est 187%)
* Lebanon – 171% (2023 est?)
* Sudan – 257% (2023 est 139%)
* Argentina – 122% (2023 est 72%)
* Turkey – 51% (2023 est 72%)
* Suriname – 53% (2023 est 52%)
* Islamic Republic of Iran – 47% (2023 est 46%)
* Sri Lanka – 45% (2023 est 29%)
* Ethiopia – 29% (2023 est 34%)
* Ghana – 43% (2023 est 32%)
* Yemen – 15% (2023 est 30%)
* Moldova – 13% (2023 est 29%)
* Angola – 13% (2023 est 21%)
* Estonia – 10% (2023 est 19%)
The Global average inflation rate has slowed to 6.8% in 2023, down from 8.7% in 2022, and is estimated to slow to 5.8% in 2024. In 2022, many other countries were still experiencing double- and triple-digit inflation rates, as shown above. The World Economic Forum reported that inflation rates have doubled in 35 out of 44 advanced countries over the past two years.
What governments are
doing around the world to
confront the rising cost of
living (selected countries)
* Cost-of-living measures in the United States amounted to the US$430 billion Inflation Reduction Act announced in August 2022, representing 1.7% of GDP.
* Chile announced a US$1.2 billion aid plan, including labour subsidies and one-time payments of US$120 for 7.5 million (US$900 million) of its 19 million residents. Thus, the total intervention amounted to US$2.1 billion, or 0.7% of GDP (2022).
* In Japan, the cost-of-living response measures implemented by the Government amounted to US$103 billion in 2022, representing 2.4% of GDP.
* Indonesia reallocated US$1.6 billion of its fuel subsidy budget to welfare spending, an amount that represented 0.12% of GDP.
* Malaysia expended US$17.25 billion, representing 4.2% of GDP, in subsidies and cash aid to temper the effects of rising prices.
* Saudi Arabia raised welfare spending to US$5.33 billion, representing 0.5% of GDP.
Source: Author’s Calculation Based on Budget Estimates
In the case of Guyana, the inflation rate remained in the low single digit. In 2023, for instance, the inflation rate slowed to 2%, below the estimated 5% (earlier in the fiscal year) for the year 2023, with an estimated 2.5% in 2024; thus, remaining below the global average (5.8%) as well.
Further, altogether, the cost-of-living measures implemented in Guyana amount to an estimated $332.2 billion annually, or US$1.6 billion, or 8.5% of GDP.
As evidently demonstrated herein, the cost-of-living interventions pursued by the Government of Guyana with the aim of combatting rising prices amounts to an estimated $332.2 billion annually, representing 8.5% of GDP. More importantly to note is that, in contrast with other countries around the world, Guyana has confronted rising prices in a far more comprehensive manner than other larger advanced economies such as the United States (1.7% of GDP), Japan (2.4% of GDP), Chile (0.7% of GDP), Indonesia (0.12% of GDP), Malaysia (4.2% of GDP), and Saudi Arabia (0.5% of GDP).
