Lowest rate of inflation (country)

According to the April 2018 edition of the International Monetary Fund's World Economic Outlook, the countries with the lowest rate of inflation (consumer price index) are Saudi Arabia and Chad. Over the course of 2017, the two countries both had an average rate of inflation of -0.9%.

Negative rates of inflation, or deflation, mean that the real-world value of a currency increases with time. In the simplest terms, deflation is what happens when supply outstrips demand in an economy, forcing a general reduction in prices. This can be caused by a wide range of potential factors, including a decline in consumer spending, a reduction in available credit or a decline in the costs of production (leading to an oversupply of goods). In the case of Saudi Arabia, the deflation is primarily a consequence of the low price of crude oil, which has lowered government revenues. This in turn has forced a decline in government spending and the stagnation of wage growth.

The IMF's projections suggest that both countries' rates of inflation will turn positive in 2018, rising to an estimated 3.7% (Saudi Arabia) and 2.1% (Chad).