Australia may be facing record inflation but it’s nothing compared to some countries as New Zealand is mired in cost of living misery – while China looks on smugly.
Prices are soaring as the nation stares down a perfect storm of Covid and spiralling fuel and power bills while flood-ravaged farmland sees food prices skyrocket.
The battle against inflation is being fought globally – and although Australia’s hurting, the 5.1 per cent inflation rate here is still among the best in the world.
Australia may be facing record inflation but it’s nothing compared to some countries as New Zealand is mired in cost of living misery – while China looks on smugly
China has so far emerged almost unscathed while most other countries suffer the hangover of Covid stimulus packages which have overheated the global economy.
In New Zealand, inflation is currently running at 6.9 per cent and has brought some families to the brink of starvation as they struggle to cope with the soaring prices.
Kiwis are actually paying 25 per cent more for food essentials than Aussies, comparison website Finder discovered this week.
They bought a basket of identical household essentials from Woolworths in Australia and their New Zealand chain Countdown which revealed the alarming difference.
The family shop cost NZ$97 in Australia, but NZ$121 in New Zealand.
Two-thirds of the price difference comes from the 15 per cent GST on all food in NZ, which is GST-free in Australia.
But Kiwis are are still paying another 9 per cent more than Australians for the same products – and with prices surging even higher, it’s getting even worse for families.
The 30-year high NZ inflation rate has driven many to extreme measures, including using water spray in the bathroom instead of toilet paper and eating garden snails.
‘We fed them oatmeal for a while to get all their poo out, then cooked them with garlic. Chewy but fine,’ Kate Todd told stuff.co.nz.
Others say they are missing meals altogether so they can afford to feed their children.
‘On a bad week, sometimes I won’t eat at all just so there’s enough for the kids,’ one mother told researchers for a paper on food insecurity in the Journal of the Royal Society of New Zealand.
Another revealed how her family relied on handouts to survive.
‘If it hadn’t have been for those food parcels, the kids wouldn’t have eaten for about a week,’ she told the researchers.
The cost of living crunch has also seen property prices plunge in New Zealand.
Homes in Auckland are now fetching 11.7 per cent less, latest sales figures have revealed, and it’s even worse in capital Wellington where prices fell 13.5 per cent.
The fall was fuelled in part by rising interest rates but also Prime Minister Jacinda Ardern’s decision to stop negative gearing on new purchases and axe it completely by March 2025.
Despite being the original source of Covid, China has kept inflation down to a near world-best 2.5 per cent, just behind Saudi Arabia’s G20 nations-topping 2.3 per cent.
But although they’ve kept inflation under control, Beijing now faces an embarrassing and damaging recession and the end of their much-lauded ‘economic miracle’.
The Communist superpower has seen a dramatic slump in its GDP after massive Covid shutdowns in Shanghai devastated production lines and exports.
On Friday, China admitted its GDP shrunk 2.6 per cent in the last quarter and was up only 0.4 per cent year on year, compared to previous annual growth of 5-6 per cent.
Unless production bounces back in the next quarter, it will send the country into a technical recession, ending decades of soaraway growth since 1976.
In Australia, the current 20-year high inflation rate of 5.1 per cent is widely expected to worsen when the latest figure is released on July 27, possibly hitting 6.3 per cent.
In a double whammy, the runaway inflation is causing interest rates to rise, adding hundreds of dollars to mortgage payments for families across the country, while wages lag behind and the cost of living soars.
But among G20 countries, Australia’s inflation rate still ranks sixth-best, far ahead of struggling allies like the US and UK, both on 9.1 per cent, with even economic superpower Germany on 7.6 per cent.
Spain and Brazil both face double digit inflation of 10.2 and 11.98 per cent, while Russia’s inflation has blown out to 15.9 per cent in the wake of its war on Ukraine.
But Turkiye – previously known as Turkey – is being devastated by the current financial crisis, with inflation now running at a staggering 78.62 per cent, even worse than Argentina’s 64 per cent.
The super-inflation took a grip after Turkish President Recep Erdogan raised the minimum wage by almost a third from US$254 to US$328, giving 40 per cent of the workforce a massive pay rise.
The opposition party says the real interest rate is actually double the official figure, and analysts warn the country’s economy could be doomed.
‘No one actually believes official Turkish data any more,’ economist Timothy Ash from BlueBay Asset Management tweeted earlier this month.
‘There is no expectation of anything like a credible policy response.’
A crashing economy saw Sri Lanka’s government rolled this week in a popular uprising when inflation hit 54.6 per cent and the country ran out of money and fuel
A similar crashing economy saw Sri Lanka’s government rolled this week in a popular uprising when inflation hit 54.6 per cent and the country ran out of money and fuel.
Elsewhere in the world, Lebanon currently has the worst inflation in the world as the economy there collapses under a 211 per cent rise in prices.
Zimbabwe and Sudan have the second worst on 192 per cent, but neighbouring South Sudan has the lowest inflation rate in the world at minus 4.29 per cent, although that figures disguises a crashing, stagnant economy in crisis.
Venezuela on 167 per cent after nine years of hyper-inflation and civil war-torn Syria on 139 per cent inflation rate round out the bottom five below Turkiye.