10 African Countries With The Lowest Inflation Rate

In the field of economic indicators, inflation plays a significant role as one of the most crucial indications of price stability. Although countries might benefit from low inflation rates and create an environment that is conducive to long-term growth and development, inflation is typically associated with negative connotations. Low inflation rates have benefited a lot of African nations, bringing about a range of benefits that assist economic stability and development.

What Is Inflation?

Inflation is defined as an increase in prices that results in a loss of buying power over time. The average price increase of a basket of selected goods and services over time can show the rate at which buying power declines. The increase in pricing, which is frequently stated as a percentage, signifies that a unit of currency buys less than it did previously. Inflation is distinguished from deflation, which happens when prices fall but buying power rises.

While some African countries have endured protracted periods of high inflation, others have benefited from having an inflation rate that is more or less under control. Stable consumer prices, the preservation of purchasing power, a favorable investment environment, competitive advantage, decreased uncertainty, an effective monetary policy, fiscal restraint, decreased poverty, savings and investment, and long-term economic planning are all factors that contribute to a controlled inflation rate.

Low inflation rates in Africa offer countries a great chance to pave the way for economic stability, resiliency, and prosperity. In light of this, certain African countries have done a remarkable job of reducing high inflation rates.

10 African Countries With Lowest Inflation Rates

Trading Economics, a data platform that provides accurate information for 196 countries, including historical data and forecasts for more than 20 million economic indicators, currency exchange rates, stock market indexes, government bond yields, and commodity prices, is the source of this list.

The information below represents current inflation rates going back to either July or June. The list includes inflation rates as of July or June as well.

1. Seychelles (-1.98%)

In July 2023, Seychelles’ consumer prices decreased by 1.98% year over year, following a 1.3% decline the previous month. The consumer deflation was most pronounced since March 2016 and was in its third consecutive month. This was mostly because fresh fish prices dropped significantly (-11.1% vs. -4% in June). Additionally, prices decreased even more for both non-food items (-1.8% vs. -1.15%) and other food, excluding fresh fish (-2.4% vs. -2.06%). After falling 0.03% in June, consumer prices dropped 0.16% in July on a monthly basis.

2. Burkina Faso (-0.7%)

After falling by 0.30 percent in May of 2023, Burkina Faso’s consumer prices fell by 0.70 percent annually in June.

3. Botswana (1.5%)

The annual inflation rate in Botswana decreased for the third consecutive month to 1.5% in July 2023, the lowest level since August 2020, from 4.6% in June. This decrease is primarily attributable to significant cost decreases in transportation (-7.6% vs. -3.1% in May), as well as slower growth in the prices of furniture and household goods (5.3% vs. 5.6%), housing & utilities (0.9% vs. 1.3%), and health (2.7% vs. 3. The increase in food inflation was also the lowest in 13 months (10.7% vs. 12.9%). Consumer prices decreased by 0.7% on a monthly basis, reversing a 0.2% increase in June.

4. Niger Republic (1.67%)

Inflation Rate in Niger increased to 3.05 percent in July from 1.67 percent in June of 2023.

5. Mali (2.2%)

Mali’s inflation rate dropped from 2.20 percent in June of 2023 to 0.60 percent in July.

6. Cape Verde (2.6%)

The annual inflation rate of Cape Verde decreased further, from 3.5% in June 2022 to 2.6% in July 2023—the lowest level since August 2021. Prices decreased primarily for food and non-alcoholic beverages (8.1% vs. 8.2%), hotels & restaurants (2.5% vs. 7.1% in June), and other products & services (2.8% vs. 4%). Additionally, prices fell for transportation (-1.5% vs -2.5%), health (-1.2% vs 0.2%), education (-0.4%, same rate as in June), and communication (-9.8% versus flat reading). Consumer prices rose by 0.2% in July, following a 0.3% increase in June on a monthly basis.

7. Tanzania (3.3%)

In July 2023, Tanzania’s annual inflation rate decreased for the sixth consecutive month to a more than two-year low of 3.3%, from 3.6% the month before. This decrease was brought on by slower increases in the costs of food and non-alcoholic beverages (6.1% vs. 7.8% in June) and clothes and footwear (3.4% vs. 3.5%). However, some CPI items experienced faster increases than others, including miscellaneous goods and services (3.9% vs 2.6%), alcoholic beverages and tobacco (3.8% vs 1.7%), furnishings and household equipment (2.7% vs 2.5%), information and communication (2.1% vs 1.9%), and recreation, sport, and culture (2.2% vs 1.9%). Consumer prices increased by the same amount in June but decreased by the same amount in July on a monthly basis.

8. Benin Republic (3.9%)

From 4.30 percent in June 2023, Benin’s inflation rate dropped to 3.90 percent in July.

9. Uganda (3.9%)

In July 2023, Uganda’s annual inflation rate dropped to 3.9% from 4.9% for the sixth consecutive month. The cost of food and non-alcoholic beverages (8% vs 11% in the prior period), restaurants and lodging services (5.3% vs 5.7%), furnishings and household equipment (1.7% vs 1.9%), health (2.5% vs 2.9%), and insurance & financial services (4.1% vs 4.3%) were the main areas where prices decreased. Price decreases were also seen in transportation (-5.5% vs -2.6%) and leisure & culture (-0.3% vs 0.4%). Following a 0.3% decrease in June, consumer prices were stable on a monthly basis.

10. Mauritania (4%)

From 5.10 percent in June 2023, the Mauritania inflation rate dropped to 4 percent in July.

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