World's Highest and Lowest Inflation Rates 2021 Inflation rates are rising in every country but not equally so. IMF DataMapper 25 10- -10% - Inflation rate, average consumer prices (Annual percent change, 2021) 21, World Higher inflation is here, but is it here to stay? You'd be forgiven if you are confused by the number of conflicting predictions, the different proposed strategies to curtail the rise in the cost of products and services, and even by whether inflation is really such a bad thing or, rather, a sign of a healthy economy. And all that without even beginning to consider inflation's ugly siblings: stagflation, hyperinflation, and deflation. Some of these questions are fairly easy to answer. Will inflation stay with us for very long? We don't know. Can inflation be good? It depends. Do we have the means to keep it under control? Maybe. The truth is that the primary tool used by central banks to bring inflation down-raising interest rates can sometimes potentially translate into the classic case of the cure being worse than the disease. If low rates encourage consumers and business to borrow and spend more money, the opposite will obviously happen with higher rates and when spending drops, so do prices and inflation. The problem is that intervening either too little or too much, too soon or too late, can unleash a number of unpleasant side effects: for example, increasing interest rates too rapidly can hurt fragile economies, damage up-and-coming businesses that rely heavily on credit to get started, worsen unemployment, and erode economic growth-in other words, cause a recession. In that sense, stable, moderate inflation is a sign of a healthy economy: as the economy grows, wages and consumer demand grow too; to meet increased demand, businesses gradually start hiring more people, buying more materials and supplies, and charging proportionally more for their products. The truth is that, just as there is no unique variable that can help predict inflation, there is also no sure-shot sequence of actions that can bring it down with the absolute certainty that no unwanted repercussion will follow. This is why, today, no serious expert is betting on how long this period of rising costs will last. Just months ago, encouraged by the vaccine rollout in many countries, central bankers around the world seemed more optimistic: they often described the first spikes in inflation as just "blips" bound to disappear soon. They were right about the main reason for those blips: Covid-19 caused serious disruption to the global economy-supply-chain bottlenecks meant that demands for what consumers and firms wanted and needed could not be met which prompted demand to far exceed supply, driving prices upwards. What they could not imagine is that the disruption would last for years, that new variants of the virus would continue to bubble up, that so many people would campaign against mask mandates and vaccines, and that global distribution of vaccines would be so unequal and uneven. Meanwhile, according to the IMF, inflation is set to increase this year in 144 countries out of 191 compared to 2020, when inflation increased in just 71 nations versus a year earlier. Will this season of global higher inflation last much longer? If we have learned anything over the past two years, it is that it is very difficult to predict the future when it depends to such a great extent on the whims of a virus. Central bankers will have to constantly rely on a wide variety of data to fine-tune their assessments and policies-kick the tires of the economy as we go, so to speak.